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TaxAssist, Accountant
Category: UK Tax
Satisfied Customers: 3
Experience:  More than 15yrs as a CPA and managing multiple companies at the same time
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Hi. Depreciation: what amount can I depreciate a multiple-apartment

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Hi. Depreciation: what amount can I depreciate a multiple-apartment rental property annually please? I understand about timing this (as in when to start the depreciation), despite doing a retrospective calculation.
I'm not using software, so could you just advise of the percentage and period allowed, so I can built the depreciation table? Thanks very much

TaxAssist :

Usually for buildings one uses 4% straight line i

TaxAssist :

Usually for buildings one uses 4% straight line i.e. for a building worth 100,000 you would write off 4,000 each year for 25 years. There are different methods of depreciation and you might need an alternate depending on the use of the building.

Customer: replied 3 years ago.



Just to verify

* Are you sure it's not 27.5 years or even 29.5 years (or is that commercial property), rather than 25?

* Are you sure on the 4%? This is privately-owned, fully rented out building containing 6 apartments. The owner doesn't live in it, although it is privately owned/administered, not company-owned/administered.



Hi Nick
That 27.5 years tax relief is, I think, an American tax allowance, but UK tax law doesn't provide for the depreciation of the building itself however you do get wear and tear allowance, other allowances e.g. repairs to the building depending on their nature. There are other considerations depending on whether the building has a business use on the ground floor. If you used a 4% depreciation annually in e.g. your management accounts, for the actual tax computation the depreciation figure would be added back i.e. no tax relief sought in respect of it. It would be replaced in the computation with things like any capital and/or wear & tear allowances etc.
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