Please could someone confirm that my thinking is correct.
We have a client who owns three pubs in partnership with their spouse. The pubs are run under a limited company and effectively pay rent to the partners.
We are investigating the possibility of making a capital allowances claim for the "fixtures" in the property and we have proved that for two of these pubs there is an entitlement to make such a claim. However one of the pubs stopped trading in its second financial year of ownership and now the owners are trying to obtain a change of use so they can live in the property.
My question is therefore, taking into account Section 61 of CAA2001, whether it would be worth us undertaking a capital allowances claim for this client on the pub which has stopped trading. It would seem to me that any allowances we claim could result in a balancing charge when the client effectively starts using the assets for a purpose other than the trade. This is because the assets would seem to have to be accounted for as a disposal at "market value". We are actually within time to claim the AIA on this property but if I am correct this will just cause greater problems when they move into the property.
Could somebody confirm that my thinking is correct as we don't want to attempt to make a claim which is just going to cause an issue for our client further down the line. Obviously we charge a fee for our claims services which again, if I'm correct, is just going to put the client deeper in the poop if we go ahead.