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Is Property Devaluation an allowable expense?

Is Property Devaluation an allowable expense?

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My client's previous accountant has claimed a loss of 150k, resulted from a devaluation of one of his investment properties, belonging to the business.

I have not heard of such practice before. Have you?

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By Craigie_Bhoy
12th Jun 2012 15:05

I would have thought the revaluatio nloss would be recorded via thew capital account/revaluation reserve - seems very strange to me to have claimed for the loss.

I'm with you, not seen or heard of this in the past - not much help I'm afraid, but certainly seems strange.

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Replying to FirstTab:
By A.Sharp
13th Jun 2012 11:04

No reserve = Real Loss.

There is no reserve yet.

So business pays 650k for the investment property and a year later it is revalued at 500K. 150k would be a permanent devaluation representing a real loss, therefore can be accounted for as an expense. That is another view. UK GAAP 6147.


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By taxguru
12th Jun 2012 20:38
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