Capital Allowances remains the only form of tax relief available to investors who purchase, refurbish or develop commercial property. An article by a leading accountancy firm suggest that a significant amount of commercial properties have never had capital allowances claimed against them, which means many people have not been claiming the tax relief rightly available to them.
This valuable form of tax relief can save claimants significant amounts of money, for example on a recent acquisition of an £850,000 office property the capital allowances totalled just under £140,000 in turn this saved the claimant £56,000.
We work with a panel of chartered surveyors experienced in this sector, each work on a contingency based fee and therefore if there are no capital allowances identified then no fee is payable! They work in conjunction with your own accountant to ensure a smooth claim process.
Capital Allowances on Acquisitions
When it comes to new acquisitions; in order to secure the capital allowances it is advisable to seek profession input prior to your acquisition. However, properties which have already been purchased even if several years ago, the capital allowances can still be claimed.
The process includes:- .
Due Dilligence:
1. reviewing the vendor’s capital expenditure on the property during their period of ownership to establish whether they have claimed the full amount of their qualifying capital expenditure.
2. reviewing the S198 CAA 2001 election, to ensure that it is correctly drafted, and included all the relevant items.
3. reviewing the replies to CPSE, to ensure that they provide the relevant level of detail and appropriate confirmations.
Claim preparation
1. This could include visiting the site, collating the relevant data and measuring the relevant areas.
2. Using specialist surveying skills, valuing the items of plant, replacement cost of the building and the valuation of the land on which it exists.
3. Forming a capital allowances report which adheres to the HMRC expectations and provides full disclosure.
Claim submission and conclusion
1. The completed report is presented to your accountant for inclusion within your tax returns.
2. Whilst HMRC can have up to 12 months to repay the tax due to a claimant, they would typically refund money within 6 – 8 weeks.
Capital Allowances on Construction
Capital allowances should also be considered on construction of commercial premises. With particular attention given to:-
Items Qualifying For 100% Enhanced Capital Allowances
You also have the opportunity to maximise 100% tax savings, available in the form of Enhanced Capital Allowances, by incorporating energy and water saving technologies in the mechanical and electrical specifications.
150% For Qualifying Land Remediation Relief Or Derelict Land Relief
Before constructing the property or indeed even before the land is purchased, it may be worthwhile considering whether a claim for Land Remediation Relief or Derelict Land Relief is possible. This provides relief at 150% on qualifying expenditure which could have significant cash-flow advantages for your company.
If you have any commercial assets old or new, large or small do not hesitate to contact us and we will put you in touch with the most appropriate consultant.
