Hi All, I have a curly one which a friend asked me. His wife has just started her own business from home and is doing really well, as a result they are looking to expand the home to incorporate a studio for her. Question 1 - If they released equity for the extension in a seperate loan split, would it be tax deductible as its "purpose" is to build an income generating room even though it forms part of their PPOR? Question 2 - I guess this would only apply if the answer to 1 is YES but how would this then effect CGT when sold? Surely they would be liable for a portion or else EVERYONE would be claiming a home office on their mortgage.