"This is where shedworkers can afford a little smile. If we treat a room in our house as 100% business, and claim all of the costs involved with that room, then, when we sell our house, the profit attributable to that part of the home will not be eligible for Private Residence Relief, and may be subject to Capital Gains Tax, if it exceeds our annual exemption.Alan also runs a useful blog which is well worth a browse
If, on the other hand, we claim 100% of the costs of our garden building, because it is not classified as part of the house, there is no liability to Capital Gains Tax. Another word of warning; a shed or other garden building will not be classified as a separate building for tax purposes, as long as it is within the ‘specified area’ of the garden (currently half a hectare, or a little over an acre). If your garden is larger than this, then you will need to be wary of the potential tax implications."
Thursday, June 19, 2008
In his penultimate look at the business side of shedworking this week, Alan Young of 1st Addition Accountancy looks at Moving On: