Depreciation on self occupied house

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This discussion explores the possibility of claiming depreciation on a self-occupied house in the UK, specifically when a portion of it is used for business purposes, such as trading. The user asks if depreciation can be claimed on a 4BHK apartment bought in FY 2021-22 and used as self-occupied from FY 2022-23, with one room dedicated to trading. The core questions revolve around whether depreciation is permissible, if it applies to the whole house or just the business-use portion, and how to calculate it. Initial advice suggests depreciation cannot be claimed on a self-occupied property as it's not capitalised as a business asset.

Sachin Singh

Sachin Singh (Querist)

13 March 2024 Hello,

Assume a 4BHK house in an apartment complex has been bought in the FY 2021-22. It has become a self-occupied property starting from FY2022-23, where one of the rooms is being used purely for trading (business), rest for living.

a) Can depreciation at 5% be claimed here?

b) Assuming it can, will it be on the whole house or on proportionate basis (for one room)?

c) Assuming on proportionate basis, does this calculation make sense

Cost of house bought = 90L (say)

Room cost = 15L

5% depreciation for 1st year: 75000

Reduced tax liability = 22500 (30% slab)

This calculation is to just get a general sense.

Kindly help. Thanks.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

13 March 2024 a) As it's not capitalised as business asset depreciation can't be claimed.

Sachin Singh

Sachin Singh (Querist)

13 March 2024 Pardon my ignorance but what does this exactly mean? Does this mean that depreciation should have started being claimed from the first year itself & it can't be done now? Thanks.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

13 March 2024 No depreciation can be claimed it's self occupied house.

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