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CT Treatment for constructing shed base at rented premises

CT Treatment for constructing shed base at...

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My Ltd company trades from my home address which is a rental property. The shed is required to store company owned equipment for which there is no room to store in the one room that I as the private tenant rent to the company. I believe that the shed being a static fixture needs to be dealt with as Capital Expenditure and not subject to any reliefs. However how about the building of the base on which to erect the building? In my case I actually have a liability as in the event of moving and taking the shed with me I will be required to make good the area back to its original state. It certainly isn’t an asset in practical terms but is there any grounds under which I can claim any allowances on this, either on the construction or at a later date if a deconstruction is required?

Thanks,

Will Hopkins

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By thisistibi
15th May 2012 12:44

Probably not

The shed and its base is a building or similar structure, and will not qualify for allowances unless it's moveable and actually moved from time to time in the course of the trade.  The fact that it can be moved in theory, is not sufficient to qualify for allowances.

Similarly the deconstruction is not eligible for capital allowances or as an allowable revenue expense.

It is not relevant that the company trades from your home address, the rules would be the same for any company operating from its own premises.

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Replying to DMGbus:
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By whopkinscom
15th May 2012 13:12

Suspected as much

It's not the fact that my company trades from my home address as such, it's more that the home address is rented - leading to the potential liability of "making good" - but I guess that gets absorbed out of taxable profit then. I also assume that this has zero impact on myself in any BIK since the expenditure will be incurred wholey and exclusively for business purposes even though it takes place at my home address - again the rental aspect I consider to be important as it is providing no potential capital improvement to premises that I own personally.

Thanks again stick person :)

Will

 

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By thisistibi
15th May 2012 13:52

Making good

Sorry, maybe I missed the making good point.  When a company exits a lease and is responsible for making good a property back (i.e. dilapidations), they are only allowable if the dilapidations consist of normally allowable costs, e.g. redecorating.  Demolition and construction costs are not allowable even if they form part of dilapidation costs, as they relate to the building itself and are therefore capital in nature.  I believe the making good of the shed would be the same - it would relate to the shed, which is capital.

I would not have expected a BIK as there is no personal benefit from the shed or moving the shed..? But it's not my specialism.

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