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We are intending to have an extension built onto the side of our property this year incorperating my home office (approx 30%)

by Hoblands 11 April 2011 |

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The remainder of the extension will be to enlarge our lounge / dining room and for a small ground floor cloakroom.

What proportion (if any) can I utilise to offset my 2011/2012 income tax? I already partly work from home using the 3rd bedroom. I am self employed and the company is me 'trading as', VAT registered with just 2 staff.

Any advise very much appreciated, it would be a pity if I couldn't get any tax benefits from this!!

Paul

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MikeGG1 posted
Paul

You should be able to claim the 30% against tax as a capital expense, but it is likely to be spread across a number of years.

You would also have to declare the property as a mixed hereditament, so you will have to pay part domestic council tax and part business rate.

Then there is the question of Capital gains Tax. The proportion that you get income tax relief on will not get Principal Residence Relief. You can't get it both ways!

You need to consult an accountant.

Mike
Posted on 11 April 2011 | Love 0 loves Report
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Hoblands posted
Many thanks for the advise. I have decided that trying to make a tax saving from this could be more trouble than it's worth. Will continue to put down the £10 per week use of residence that has worked for me for years...

Cheers

Paul
Posted on 12 April 2011 | Love 0 loves Report

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