How tax-efficient is it for me to build an office in the garden?

• Published date: 30 June 2022
• Publication title: Irish Times (Dublin, Ireland)

A By renting an office to carry out your photography business, you are permitted to account for the rent expense against your trading income at the end of each accounting period. Replacing the rented space with a home office has certain tax implications

The overall costs associated with the construction of the office in the garden will not be allowed for capital allowances (tax depreciation). These costs would include concrete foundation work, building of walls, insulation and placing a roof on the office. In our view, a wooden-type structure will not qualify for annual capital allowances either. Under various case law, broadly speaking, the premises within which the trade is carried on is treated differently to the plant with which it is carried on, with only the latter qualifying for tax relief.

You will be able to claim capital allowances on the fit-out of the office. For example, purchase of office furniture, lights, computer equipment and other fixtures and fittings. Capital allowances operate at a rate of 12.5 per cent and are utilised over an eight-year period. You will therefore need to separate the fit-out expenses from the costs of building the office structure, to correctly reflect your capital allowance claim.

There are other taxes to be considered also, such as reclaim of VAT on costs if you have a VAT registered business. Any future sale of the office structure may give rise to capital gains, if the sale proceeds to exceed the original costs of construction.

Suzanne O'Neill is a tax partner at RSM Ireland, rsmireland.ie

Can we ask tenants to leave our apartment if we return from abroad to live in it?

Q My wife and I are in the fortunate position to own two houses, one in Ireland and one abroad (within the EU). We own both without mortgages. We have several other investments, mostly rental property. We are in our mid-70s, with grown-up children and grandchildren. While none of our family is dependent on us, we are considering liquidating our assets and sharing them among our children when we can have the opportunity to see them enjoying the "spoils". We would plan to retain sufficient funds for our upkeep.

My question is, if we buy and retain just an apartment in Ireland that we would rent out, would we be able to ask tenants to leave if we return to it so that we could live in it?

The question you present is pertinent because it addresses the issue of tenure, which really is the elephant in the room when discussing property legislation in...