tax deduction for renovation of home office

[estellemorris]

We set up a ltd company 3 years ago and use part of our house an office (for 4 people). We now need to do some renocation + extension to this home office (renovation to existing office + extension that will be used half as personal dining room half as business meeting room). Can we claim corporate tax deduction + VAT deduction on building materials for this work without taking the risk of being liable for CGT when selling the house?

[Instinctive]

Any part of your house which is used exclusively for business will not be exempted for CGT. But, any such chargeable gain may be covered by taper relief and annual exemptions.

Ramnik

[estellemorris]

no part of our house is used exclusively for business (the office is also used as a guest room at weekends). My question was more related to costs of renovation and whether they can be deducted of corporation tax/vat?

[Instinctive]

Any expenses which are incurred wholly and exclusively for business purposes are deductible in arriving at taxable profits. Some expenses may need to be apportioned between private use and business use. Improvements which increase the value of the house, eg, extensions etc, are not allowable as expenses.

Ramnik

[estellemorris]

that's a difficult one, as most work done on a house increases it's value. The renovation work done on the office is mainly insulation, electric upgrades and re-flooring, all of which could potentially increase the vlue of the property. Also would they qualify as works incurred exclusively for business purposes?

[King_Maker]

What does the Agreement with the company say? Is there one?

It seems that the company has a licence to occupy at best. Does it pay Business Rates?

What expenses (heating etc) do you claim at the moment?