Apportionment Of Mixed-Use Asset

Question

A client is buying a caravan as a home office area. They have an LTC which owns rental property. If they took the caravan away to use as holiday accommodation from time to time, how should we treat this? It will be a private asset which is being made available for mostly business use, but some private use.

Answer

The easiest approach would be to apportion the costs based on usage. Use the same principles as if it was a private car used occasionally for business purposes.