capital funding Grant- Is it taxable?

[newkid]

Hi All

Due to fill my tax return in, late I know!

In Feb I had Capital Funding from the council, value £2500 for instalation of downstairs W/C to make access easier.

Does anyone know if this is taxable?

Thanks.

[green puppy]

Maybe you would put it through as income and then the cost of the wc through as an expense. Hopefully someone else will be along to clarify.

[newkid]

Thought about that but not sure as it is a fixture and fittings. Wondered if it could be classed as a capital gains which i believe the amount is up to £9000 approx before tax. Have googled it but cant find a definate answer.

Thanks for replying.:laughing:

[Cammie Doodle]

When we did our's last year we put it as money "in" and then deducted it (have all receipts of items purchased) Hope that makes sense ?

[newkid]

Hi June

Thanks for advice.

I know what you mean. What did you buy though? Did you buy resources or did you have your property adapted? :)

[MrAnchovy]

Capital grants are not taxable income (and they are not capital gains either). The correct treatment is to offset the cost of the capital expenditure but as you rightly point out, expenditure on building work is not an allowable expense (except where it qualifies as maintenance), and nor does it qualify for Annual Investment Allowance or any other capital allowance so you can't include the expenditure in your accounts anyway.

So ignore it - HMRC guidance here (http://www.hmrc.gov.uk/manuals/bimmanual/bim40451.htm).

[newkid]

Thanks for advice.

I was thinking of doing that, just wanted to do it right. Will finish tax return now.:laughing: