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Bought my garden office through limited company, couple of things our accountant told us;
- It is being devalued over a 7 year period, so as long as you stay in the house longer than that it is then clear on the accounts
- If the office is not 100% work use then you can get around the CGT issue, hence why I have 20% of mine for personal storage
TBH I think as long as you don't take the piss then you are probably ok with a home office in the garden, but wouldn't want to risk a permanent building (I looked into converting one of the barns here, but quickly decided against it).
- It is being devalued over a 7 year period, so as long as you stay in the house longer than that it is then clear on the accounts
Sam_w-
If you sell your house, do you have to come up with a way to allocate a part of the sale price to the garden office and then pay tax on 80% of that in the LTD (versus a zero basis given full depreciation)?
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The problem is that the CGT is payable by you the individual & home owner, not the company.
In that regard, it doesn't matter if the value of the asset has depreciated to zero (in itself a contentious issue, as I understand it) - the CGT is payable on a proportion of the residential property value.
NickCJ
NotThamesWater
Financing even a garden office through a Ltd is very unwise - when you sell your home, even as your primary residence, you would pay capital gains (usually) proportionate to the land area covered (not floor space).
The CGT thing would still apply if it were a loft office, as the primary residence exemption only counts if the entire property is exclusive of business use. I have no idea what the pro rata amount might be though.
It's worth noting that a garden room would be a devaluing asset, whereas a loft would likely not.
IANAC, seek professional advice etc... you don't want to have an HMRC investigation opened on you. They are not fun.