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Post Info TOPIC: Use of Home as office versus Capital Gains Tax
Amanda


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Use of Home as office versus Capital Gains Tax
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Hi Everyone,

I'm sure this has already been covered but after going through several pages I can't find what I am looking for.

I work from home and the year concerned (08/09) only a few days per week, most weeks, I know you can claim a small amount and a friend whos an accountant has said put through a small amount don't go mad though, but what effect, if any does it have on Capital Gains Tax later?

I think a previous thread was saying about £3 per week depending the amount of time spent.  The reason I ask about Capital Gains is we may move next year and don't want to be hit unexpectantly with a Capital gains.  If I were to be hit with Capital Gains then it wouldn't be worth me claiming the small amount for 'use of home as office'.  Sorry for a long winded question, just making sure I can claim correctly on my SA.  (I only do my own SA I don't do anyone elses).

I know someone will have the answer as this forum is great for this.

Many thanks,
Amanda

-- Edited by Amanda on Sunday 17th of January 2010 10:50:20 AM

-- Edited by Amanda on Sunday 17th of January 2010 10:52:01 AM

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Amanda
Shamus


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Hi Amanda,

Hope your having a good day.

I think that your OK on the CGT front for two reasons.

1) The issue only seems to occur when an area of the house is used wholly and exclusively for the business.

2) If that part of the residence has been used as part of the main residence then the last three years before disposal are excempt.

If it comes to arguing with the revenue I think that your in a better position where you allocate a reasonable percentage of actual expenditure than to set a specific weekly figure (I got called in on that one!).

Also, general concensus from local government is that providing businesses run from home are unobtrusive (mainly I think that your street doesn't become a car park) they won't be re-assessing your property for business rates.

Hope this helps,

Shaun.

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Shaun

Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Amanda


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Hi Shaun,

In you answer no.2 does that mean if I move say in 5 years time that I will be clobbered in CGT? Sorry get abit confused as I have had conflicting answers in the past from 2 different accountants, and natually want to claim everything poss to reduce tax bill. Although I am far too honest for my own good and probably don't claim have as much as I could.

Many thanks
A

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Amanda
BackOfficeGroup


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Shaun

I think I read somewhere that by doing the % of actual expenditure would attract CGT rather than the opposite, which is why I always go for the few pounds a week scenario, in order to avoid any such claims? They say that in order to come to a % figure, you would have had to work out the room sizes and time spent at work in the home.

Amanda

I would charge a few pounds per week for use of home, if only to avoid anything.

P

PS Shaun, do you have a life, lol, replying even on a Sunday!!

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Amanda


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Hi P,

Thanks for your answer, I am so busy in the week with everybody elses stuff plus had 2 kids off school due to the snow I am having to do mine on a sunday night which is really sad!

I would rather just claim a few pounds per week and avoid CGT, I don't want to be greedy, just alittle bit is better than nothing.

Many thanks
Amanda



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Amanda
Shamus


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Evening Amanda,

You want two different answers, ask two different accountants!

All that your claim is for is a minimal amount towards the use of resources such as heat and electricity, not payment towards the interest on your mortgage or indeed payment towards the capital in your house.

Your not actually claiming a whole room is used wholly and exclusively for the business and putting that through your books on that basis either.

I really don't think that you have to worry about capital gains in this instance.

If someone comes on board with an alternate approach I'll look deeper into this, which generally means the revenue website a search through recent posts on accounting web and a read through the current Kaplan textbook for advanced taxation (something that I think that everyone in this business should buy every year! My FA09 version should be arriving from Amazon this week (just in time as FA08 is about to drop apart)), .

I'll keep my eye on the posts to this one (sure that Phillip from the back office group will have an opinion that will open up the debate tomorrow morning).

Talk later,

Shaun.

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Shaun

Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Shamus


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And there we go!

Hi Phillip, was missing out debates so much just couldn't wait until Monday to get them started!

Got to get my boy tucked up in bed now but will be back on line later.

Talk soon,

Shaun.

-- Edited by Shamus on Sunday 17th of January 2010 09:32:00 PM

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Shaun

Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
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