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The garden office part 2: Personal ownershipby
The tax treatment of the garden office pod depends on whether it is used wholly or partially for business, and if it is owned by the individual or the business. This time we examine personal ownership of the pod.
Where the pod is going to have a mix of business and personal use, perhaps in order to keep within permitted development rules, consideration should be given to incurring the installation costs personally. Personal ownership can help to keep things simple in the longer term, although comes at a price in the short term.
The immediate downside is that the individual will need to find the funds for the installation, which may mean borrowing personally or extracting additional funds from their business. For an incorporated business, this could mean an extra tax cost on additional dividends or salary. It also means forgoing any potential tax reliefs on the installation of the unit which the individual’s business may otherwise have been able to claim (which I’ll look at in part 3 of this series).
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Helen Thornley has a focus on personal and capital taxes. Initially training as an accountant before moving to tax, she worked in practice until her appointment as a technical officer in 2017. She also has an interest in the history of tax.