Can I claim depreciation on insulation costs?
Question from Robert updated on 2nd December 2009:
Our expert Mark Withers responded:
I think the important thing here is that the insulation work is integral to the building and is therefore simply maintenance to the building. IRD have been very determined to prevent investors from seperately capitalising individual items of building fitout as seperate assets and have issued a ruling that essentially says that an item must be capable of physical or functional seperation from the building to be a seperate asset. So if you follow this logic it stands to reason that the insulation work is not a seperate, stand alone asset and is therefore repairs to the building despite the fact that there may not have been insulation there previously.
Mark Withers and his team at Withers Tsang & Co specialise in advising on property related transactions, valuation and restructure services and tax planning.