I have a client who owns a commercial property and rents it out, one of the leasees being his 100% owned company. I believe that in this instance the £50,000 AIA should be shared (sharing permises) although confirmation on this point would be useful.
The rental business has a 30 March year end and the company 30 September and I am unsure as to how to work out how much AIA the company has used up. Do you look at the actual date the additions were made in the company? Ie if all additions were after 5 April 2009 (or 31 March 2009) for company y/e 30/9/09 then the rental business can have full £50k in 2008/9? Any guidance would be gratefully received.
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Not relevant
Putting aside the question of whether letting a property constitutes a "Sole Trade", it rarely if ever does.
There is no need to restrict where the two entities are both unincorporated and incorporated, the Revenue's manuals state:
You should note that the two conditions are applied to companies under common control and unincorporated businesses under common control completely separately. There is no rule that requires a taxpayer to consider whether, for example, a company he controls should be treated as ‘related’ to a self-employed business he owns, or whether his company should be treated as related to a partnership in which he has a controlling interest.
Further question - does £50K AIA need to be reduced for 31 March
Thank you for the reply. As the client concerned has drawn up rental accounts for the year to 31 March 2009 do I need to restrict the £50k AIA claim to 360 over 365 of £50K (ie £49,315) because AIA's for an individual can only be claimed from 6 April 2008?