Use of home for business and claiming expenses.

Hi,

My wife and I applied for planning permission to build an extension onto our house to use as a Montessori Classroom. Planning was granted and we built the additional room, and she now runs a succesful Montessori School from there. She is operating it as a Sole Trader.

Obv the School incurs expenses for gas, electricity etc which are paid from the household bills, it has 2 x 3KW Storageheaters for instance which must be responsible for 60% plus of our ESB bill in winter.

What sort of Tax Reliefs are available in this situation? How is a fair percentage of household bills to be expensed to the business calculated? I can find no relevant guidelines on this on revenue.ie. Can any of the mortgage be expensed through the business? If so, does this have CGT issues on the sale of our family home in the future?

Any advice, guidance or links to relevant information gratefully received.

Kind regards,

Inquitus

From reading the threads that touch on this on this forum I find:

1) Nothing of the cost of construction (bricks, mortar etc) can be claimed without CGT implications down the road.
2) Furniture, Flooring etc can be claimed, and I presume specific stuff like firealarms etc required for the business, but of no use to the house.

Still see nothing about what bills etc can be claimed and how the percentage should be calculated. Specifically - gas, electricity, phone, internet

Is her Montessori Teacher training allowable? It took place in the 18mths running up to the opening of her own Montessori, during which time she worked for no other Montessori and the training was wholly undertaken with the intention of building the school out the back?

As the extension was purpose built for the business - it will be considered a business asset, and therefore will be liable to CGT on sale.

You should be able to claim any reasonable apportionment of heating and light costs, and any interest on the loan to build the extension.

Her Montesori teaching training is not tax deductible, as it was not incurred in the nature of the business, but incurred so that she coud put herself in that position.

You should get an accountant or tax advisor, to make sure