Bought a second house for work purposes, what can i claim?

[THEPUMA]

Re CGT, make sure you make a PPR election for this to be your main residence within 2 years of acquisition. This will then give you the flexibility to vary this election in the future and will at least entitle you to the last 3 years of ownership exempt from CGT.

I agree that 7/7 should have been claimable if it wasn't used at weekends.

[handyandy]

I agree that 100% shoudl be claimable as expenses incurred wholly in carrying out your employment as you did not use it at weekends for personal use. I do exactly the same and also claim my weekly commute costs to get to and from my home to the work flat.

However, there are few complications;

If you personally bought the 2nd house then there is a good argument from HMRC that it is now your home (and if you make it your PPR then you are handing that one to them on a plate!). If it's you're home then it is not a legit cost of carrying out your business.

If it's not classed as your home then you need to keep in mind the 24 month rule if you claim any expenses related to it (most people only think of the 24 month rule in relation to travel expenses but it applies to any costs related to being at a temprorary place of work). I think a very strict HMRC interpretation might mean you could not claim the costs of a 2nd home for more than 24 months as you woudl be substantially working inthe same place. So you may want to show a patern of doing <24 months based there then contract somewhere else for 3-6 months - preferably you'd rent it out during that period to show it was not your main home.

I don;t know about claiming the mortgage interest but you can certainly claim a market rent as an expense (because if you were not using it for work you'd be able to rent it out) if you are clear of the above two points. However, if you do that then you will probably need to declare that as rental 'income' on the SA tax return!

You could always have bought the property through your company in which case you can probably avoid the increased income on the SA but probably still liable to corporation tax as company earnings on the deemed rental income (i.e. if it's a company asset the company coudl have been renting it out and making profit but it let you use it) - but I'd expect you'd need expert advice on buying a property thru your company as I'm sure there are all kinds of other rules and this is a pretty complex area.

HTH