Home Office Build tax query

[Brian O'Brien]

Hi there.

I have searched here and elsewhere but can't seem to get a clear steer on this.

I know someone who wants to leave their serviced city centre office and build an office in the back of their garden (it won't be adjoining the house but access will be from the house through the garden) Cost c. €30k plus VAT.
They were advised (by a non-tax person) that he could put it through the business, claim the VAT back, and get capital allowances off his tax bill. I think in theory this works but I gather this raises other issues, namely:
1) As the office will be solely for business this may have PPR ramifications down the line ant there is possibility of a CGT liability on disposal
2) According to the Rates Office this will generate a Rates Liability.

The office will only be used for business purposes and (I understand) will not require planning permission. Given this, is it correct that the VAT on build costs can be reclaimed and the Capital Allowances claimed (and at what rate?).

Thanks

Brian

 

[T McGibney]

They need to get their own advice. Capital allowances aren't normally available on construction of office premises and there will be CGT ramifications if a part of his PPR is used exclusively for business purposes. VAT on property is a minefield and there may be other pitfalls. The last thing you need is them blaming you for bad or incomplete advice.