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FHL integral features

FHL integral features - capital allowances on a previous home which is now an Airbnb

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My client has a second home which was previously on a long term rental. She has since turned it into an Airbnb and it is available to rent 365 days a year.

The property is classed as a FHL and can therefore claim Capital Allowances.

We have done this for new fixtures and fittings however we are just wondering how to approach the capital allowances on integral features.

Any reading I have done on the subject talks of the purchase price of the property and apportioning between 10-30% of the cost of the property towards integral features. My clients scenario is different as she has owned the property for 20 years. If anyone can help me with my below questions it would be much appreciated:

1. Can capital allowances be claimed on integral features when a physical purchase has not taken place and the ownership has remained the same. 

2. Will a claim on integral features reduce the base cost of the property for capital gains purposes.

3. Does a specialist surveyor have to undertake the valuation of the integral features

I understand that there could be pitfalls if the client then sells the property or reverts back to long term rental contracts.

If anyone has experience of the above any other useful information would be gratefully received as I feel I am scrambling about in the dark.

With Thanks


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By Piltdown Man
04th Jan 2019 09:53

Hi Leigh,
My views on your questions are:
1 Yes, but not on "pre-commencement integral features"
2 No
3 No, but advisable
The main pitfall that will arise if the property falls out of FHL use and back into an ordinary property business (in the same ownership) is that the capital allowances given will almost certainly be clawed back as there will be no possibility of entering a CAA 2001 s198 election.

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