Writing off

[drivin_me_nuts]

Afternoon all,

quick question. Shopfitting: Can this be written off? Not sure really.

Also, can someone please point in the direction of a site or advice in which I can find out if/how much I am going to have to pay if I take out a new lease. Two options, one at £32k per year, one at £55k per year. Would these incurr any extra tax charges?

Thanks

[BigAlinEmbra]

If you're buying a property then shopfitting would be added on to the cost as costs of bringing the asset into use and depreciated appropriately.
(Don't do commercial stuff but I'd suspect in the region of 5 years would be reasonable.)

Leased property it would just be included with any other of your set up costs for a business.
If as a result of this your first year is a loss you can carry forward the loss to reduce your tax liability in future years.

So I suppose the answer is that yes, it can be written off.


Why do you think you would be paying tax on a lease?
Are you maybe thinking about business rates, which are charged on the rateable value of the property? If you are I'd guess that the building with the higher lease will have the higher rates.

If you want anything more exact, EricMc is your man, I'm public sector.

[voyds9]

There is a tax on a lease based on the predicted raise in the property price whilst you are renting it. But it falls at a certain threshold (can't remeber what) below this you pay nothing, above this a proportion of the rise. Luckily never had to pay it but been close a few times.

[BigAlinEmbra]

Think EricMc would be the expert here, just had a look and it would appear if the NPV of the lease os over £150k then you have to pay SLDT at 1%.
No more than 2 years for the £55k lease at a time then?

[Eric Mc]

Normally Fixtures and Fittings would be capitalised in the Fixed Asset section of the business balance sheet. For accounts purposes, Depreciation over "x" number of years will serve to write off the value over time.

The Revenue use their own version of Depreciation which they call Capital Allowances (CA). CA rates are often more generous than Depreciation - for iunstance, there is a good chance you will be able to claim a one off First Year Allowance of 40% on the value of these Fixtures. From the second year onwards, the Fixtures will be eligible for an annual CA of 25% calculated on the reduced balance remeaining on the asset brought forward each year.

Edited by Eric Mc on Saturday 23 September 12:17