CGT on portion of PPR used as an office

[J H]

I claim an amount of use of home as office. This is based on my annual cost of mortgage interest, rates and utilities. I have 4 bedrooms, use one as offfice so claim 25% of above cost. I kow my local tax office as happy with this in principle (though whether they agree with 25% dont yet know)

However what happens when i sell home and make, say, £100k profit, would they assess me on 25% of the profit? pro-rated for the period used as office

[Peter D]

25% no way. What about all the other rooms. You're opening your self up to a CGT issue. HMRC District valuer will point you in the direction of the floor area of you 100% dedicated office in propertion to the remainder of the house. 25% they will fall about laughing. Yes your closing sentence may prove to be correct and espensive. Regards Peter

[Pollard&Co]

I agree with Pete. CGT will apply

What amount does the 25% come to in your accounts?

view the following link from the HMRC on how you should apportion it.

http://www.hmrc.gov.uk/manuals/bimmanual/bim47825.htm

www.pollardandco.com Bradford Accountant

[piazope]

Hello Peter,

I am considering having a 'wooden' purpose built office (approx £15-20k) in my garden, what would be HMRC views, Is this a capital item; I believe they depreciate in value over time?

Thank y0u.

Sincerely

[Peter D]

I would suggest you will get a wider response if you post this in your own thread. Regards Peter

[piazope]

Thank you Peter, I have done just that.

Sincerely,

[piazope]

Going back to the initial question from JH:

One could always let out their property and rent another. obviously one would have to do the math, it worked well for a friend of mine.

Sincerely,

[Peter D]

I really do not know what you are on about. ????? Regards Peter