Rental income accounts figure for Capital Allowances

I am in the process of completing my rental income accounts for 2014. Somebody told me to use 12.5% of the contents figure on the house insurance as the figure for capital allowances. This person has been doing in for last few years with no problems.

I am just wondering has anybody else heard of this before?

COB said:

I am in the process of completing my rental income accounts for 2014. Somebody told me to use 12.5% of the contents figure on the house insurance as the figure for capital allowances. This person has been doing in for last few years with no problems.

I am just wondering has anybody else heard of this before?

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Yes - that's correct.

There are a couple of views on the value of assets for capital allowances.

1. When the assets have been purchased and put into a rental property it's 12.5% of the cost.

2. Where the assets were used in a PPR which subsequently became a rental property then it's either 12.5% of the cost written off over the remaining 8 year life or the market value on renting @12.5%.

It's not the value for insurance purposes.