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Where Taxpayers and Advisers Meet

Investment Property Furnishings, carpets, etc

Posts: 1
Joined: Wed Oct 17, 2018 1:17 pm

Investment Property Furnishings, carpets, etc

Postby OutofPractice » Wed Oct 17, 2018 1:29 pm

Our company has purchased a property that will be held for capital appreciation (and possibly to be rented in the future). This is not the companies main business and any rental income will be small in comparison to its main trade. Can the company capitalise costs for new carpets, furniture, white goods, etc in the property if it wanted to rent it as furnished or is this all revenue expenditure? If capitalised does it form part of the investment property value or should be classified separately and plant, machinery, equip, etc? If revenue expenditure is it allowable as deduction in corporation tax as part of the existing main trade?

Posts: 220
Joined: Tue Sep 26, 2017 6:28 pm

Re: Investment Property Furnishings, carpets, etc

Postby AdamS93 » Thu Oct 18, 2018 9:57 am

Renting one property (not a furnished holiday let) would not be considered a 'trade' as such.

Your company which was a trading company may not be considered a trading company for the purposes of Entrepreneurs Relief and other CGT reliefs - you ought to have got some professional advice before you brought the property. When you start renting the property there will potentially be massive VAT issues.

The company can treat the furniture and the white goods as assets of the company, but they are separate assets and do not increase the capital value of the property. Capital allowances may or may not be available depending on how you plan to let the property.

Now there is an investment property within the company, things will start to get far more complex, even the compliance work, so it is probably worth engaging an accountant to help you with everything as they will definitely save you more tax in the situation, than their fees would be.

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