Depreciation for Residential property in a SPV

Depreciation for Residential property in a SPV Company

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Hello All

I am a question about property deprication .  My client is running a SPV company, who has purchased two residential properties and rented them out.  One property is leasehold, the other one is on freehold.  Now I am doing annual account for her. I am wondering How I shall calculate the depreciation for those two properties. Many thanks,

 

Caroline. 

 

Replies (11)

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By Paul Crowley
22nd Dec 2020 16:58

Is an SPV company just a normal company?
Or is it special

Why depreciate?
Are they losing value

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Replying to Paul Crowley:
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By happystone
23rd Dec 2020 09:54

It is a normal one. Now I understand, I don't need depreciate them. Thanks .

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By johngroganjga
22nd Dec 2020 17:09

If they are investment properties, as they appear to be from what you say, you don’t depreciate them. Full stop.

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Replying to johngroganjga:
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By happystone
23rd Dec 2020 09:53

Understand, thank you very much.

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Replying to johngroganjga:
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By Wanderer
23rd Dec 2020 10:16

John. doesn't it differ depending on whether FRS105 accounts or FRS102?

https://www.accountingweb.co.uk/business/financial-reporting/frs-105-mic...

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Replying to Wanderer:
John Toon
By John Toon
23rd Dec 2020 12:22

It does

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Replying to Wanderer:
John Toon
By John Toon
23rd Dec 2020 12:22

It does

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By JCresswellTax
23rd Dec 2020 10:26

If you are encouraging your clients to call companies 'SPV's' - please stop now. It is the most annoying and meaningless term going.

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Replying to JCresswellTax:
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By sonoftwosheds
23rd Dec 2020 11:49

oh, i thought it was only me, such a wind up, all these new "property developers" thinking their company is special

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Replying to sonoftwosheds:
John Toon
By John Toon
23rd Dec 2020 12:32

Unfortunately, I don't think this terminology is going anywhere. It seems to be particularly endemic in the property world and mortgage lenders will regularly require an "SPV" to be created.

Of course, anyone who is reasonably sensible, knows that a SPV in this circumstance is just a bog standard Ltd co set up for £12 at Companies House. In reality a "proper" SPV should have appropriate restrictions written into the M&As of the company but this is disappointingly an infrequent occurence. In addition a SPV's purpose is to ring fence risk for the owners of the entity so any cross guarantees/PGs etc immediately neuter the purpose of creating said SPV...

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By Wanderer
24th Dec 2020 02:11

happystone wrote:

Hello All

I am a question about property deprication .  My client is running a SPV company, who has purchased two residential properties and rented them out.  One property is leasehold, the other one is on freehold.  Now I am doing annual account for her. I am wondering How I shall calculate the depreciation for those two properties. Many thanks,

 

Caroline. 

 

Wow you've done well!
On 5 June you worked for a logistics company:-
https://www.accountingweb.co.uk/any-answers/is-distribution-cost-classif...
By 26 June you had clients which you were doing self assessment tax returns for:-
https://www.accountingweb.co.uk/any-answers/self-assessment-accounting-p...
And now you are preparing accounts for 'SPV companies".
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