Buy to let within a limited company

How to account for initial cost of appliances within FRS 105

Didn't find your answer?

I am familiar with accounting for and taxation of buy to let owned privately; I understand how to account for the property with FRS 105 BUT how do I account for the initial cost of appliances (white goods, lighting) purchased.  If purchased within private buy to let, then they are not allowable for tax - there is no balance sheet so they do not appear anywhere.

I assume they are not allowable within a limited company - but correct me if I am wrong.  Are they disclosed in the balance sheet, but do not form part of the capital cost/improvements or are they disclosed in P&L but not allowed for tax?  Any advice would be welcome.

Replies (5)

Please login or register to join the discussion.

avatar
By User deleted
23rd Mar 2022 16:43

PIM3210 / CTA2009 s.250a would appear to confirm your assumption, although I confess I've not dealt with this in practice myself yet.

As an aside, why have you decided on FRS 105 as opposed to 102?

Thanks (0)
Replying to User deleted:
avatar
By CJMA
24th Mar 2022 12:32

Thank you. Re FRS 105 - initially simplicity and no revaluation however draft accounts now prepared which show BS total in excess of micro limit so FRS102 it is!

Thanks (0)
Replying to CJMA:
avatar
By Bobbo
24th Mar 2022 19:03

But surely the company is still well within the turnover and employees thresholds ???

Thanks (1)
Replying to Bobbo:
Avatar
By I'msorryIhaven'taclue
25th Mar 2022 08:16

On top of which your original question specifies FRS105.

Thanks (0)
avatar
By More unearned luck
23rd Mar 2022 18:06

Why should the mechanics of any tax relief have any bearing on the accounting treatment?

Subject to materiality, the initial cost of plant and machinery, including fittings should be debited to fixed assets. Whether they should be depreciated or not is a GAAP question, of course, but just because tax relief is due on the renewals basis doesn't licence the same treatment for accounting purposes, although doing the same makes life easy, but I doubt that it would be correct.

Fixed lighting like the rest of the electrical system is a fixture and thus part of the fabric of the building and no tax relief is due on such expenditure, although replacement would be a repair for tax purposes as it is for accounting purposes. This doesn't apply to bulbs and shades and table lamps etc.

Your question implies the property is residential. This answer is on that basis.

Thanks (0)