Solar PV Feed in Tarrif System - Tax Breaks - Property Comp

by **Robert May** on Tue Sep 06, 2011 12:13 pm

Hello

We are professional landlords that own a number of properties that are let to tenants.

My understanding is that Solar systems do fall under the normal Annual Investment Allowance, which allows companies to recoup (at present) tax spent on equipment and business assets of up to £25000.

Could we hypothetically fit solar systems that pay directly back into the grid onto our properties that are split into flats and leased to tenants or does the above apply only to specific companies and the way they conduct business ie factories?

Many thanks

by **tonycourt** on Tue Sep 06, 2011 5:55 pm

Hi Robert,

Capital Allowances whether these are claimed within the Annual Investment Allowance (AIA) or not can't be claimed as a tax deduction form income derived from residential rental businesses; with the exception of income from holiday lets that meet certain conditons. But you are correct that the costs of alternative energy systems such as solar pannels will usually qualify for a tax deduction under the AIA rules. The current AIA limit is £100,000 but this is due to fall to £25,000 from April next year. However there are transitional rules which mean that the reduction can affect businesses in an accounting period straddinlg that date. Essentially the current £100,000 limit will be pro rated on a time basis to the period prior falling before April 2012.

I don't understand the second part of your query but if you are asking whether AIA/capital allowances can be claimed as a deduction against rental profits from resdiential accomadation or only against trading businesses, then I think I've answered your question in my comments above.

TC

by **Robert May** on Wed Sep 07, 2011 10:54 am

hi tony many thanks for that....

yes the idea was to find out IF we could put a PV system that pays into the grid on all buildings we own and rent and offset the costs of doing so against profits. i guess that's not possible for us to do... as we are a landlord?

as i understand it if it were a case where it was a factory building where we produce our widgets we could.

HM Revenue website is not very clear on this... hence the q's.

much appreciated.