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Taxing sunshine

28 August 2013
Issue: 4417 / Categories: Forum & Feedback , Business , Capital allowances

A limited company has installed solar panels on the roof of the factory from which it trades. The factory is owned by the company directors and is let rent free to the company

My clients are a limited company and its directors. The directors own a factory which is used by the company. As a means of reducing its energy consumption the company has paid for the installation of solar panels on the roof of the property.

My question is whether the company can claim the annual investment allowance in respect of the cost of the panels. I have seen a comment that this is not possible where the property is not owned by the claimant but cannot find anything to substantiate this. Is this correct?

At present the company does not pay a rent to the directors; would it help with any capital allowances claim if it did and would there need to be a formal lease?

Are there any other tax implications that I may be overlooking?

Query 18 247 – Sunny

Reply from Pegasus


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