Capital Allowances

What Is It?

It is a comprehensive survey on commercial property to identify items that qualify for capital allowances.

This exercise is of benefit for any tax‐paying person, company, LLP, partnership who owns commercial freehold property/properties.

It may achieve a retrospective capital allowances claim and will lead to a positive adjustment to the capital allowances pool going forward.

Key Features

To extract ‘hidden’ capital allowances from freehold property expenditure whether retrospectively or current year.

In relation to retrospective capital allowances, a maximum of two years additional allowances can be claimed, potentially resulting in tax repayment s for earlier years. This does not preclude going back up to 15 years to identify qualifying assets on which to make the retrospective claim.

The Provider will deal with any HMRC enquiries directly related to his report up to the Special Commissioners, but excluding any third party costs.

If a claim is subsequently reduced as a result of a Revenue enquiry the Provider’s charges will be reduced proportionately.

No fee is charged if no viable claim is found.

If a claim is likely to produce less than £50,000 in additional capital allowances in respect of one or more commercial properties it is unlikely to be viable.

If the purchase of the property took place more than 15 years ago, due to the difficulties in obtaining the relevant documentation, it is not worth pursuing. However, we can always (if not all ready claimed) consider later, substantial additions to the freehold property

This exercise is not a tax avoidance scheme but simply a recognised accountancy discipline. Whilst every case is different, and each sector has its own expectations, as an average, the Provider would hope to identify capital allowances of between 20% to 35% of the freehold cost.

Individuals, Partnerships, LLPs and Ltd companies who own a commercial freehold can benefit from this exercise as long as they are UK taxpayers. Examples include care homes, office blocks, student apartment blocks, leisure park, cinemas, day nurseries, car dealership, actices, hotels, B&B, pubs, health centres and garden centres.
veterinary practices, medical practices, B&B, pubs, health centres and garden centres.

The immediate exceptions are:

Buildings where IBAs or ABAs have been claimed. However, if only part of the property ther part. has been subject to IBA, a valid claim can be made as regards the other part.

Inherited properties where the District Valuer was not involved.

Contracts of Purchase involving Section 198 CAA 2001 elections.

Properties held by Executive Pension Funds, local authorities, charities, trust or offshore.

On new builds, extensions or refurbishments, our provider will liaise closely with the architect and/or quantity surveyor and will, if necessary, carry out a room by room inspection, in order to maximise the claim and complete the summary report at the earliest opportunity. It is important to contact our specialist prior to carrying out any major remedial/refurbishment work in order that they can identify the original items still in use at that date. Our provider can then revisit the site after the work has been carried out to recorall the new qualifying expenditure. They will produce a summary report for the you.

The logistics of carrying out claims where the purchase took place over 15 years generally means it is difficult to obtain the required paperwork as the client may have lost the relevant
documents or they may have changed accountants several times. We therefore suggest a time bar of 15 years.

With regards to the retrospective claims, where all the relevant paperwork has been received by our specialist, they will, in most cases, submit a claim to the Revenue within 6 weeks and on average the Revenue accept the claims within 12 to16 weeks.

The provider can also provide advice prior to the purchase or sale of the asset with regard to the maximising of our client's capital allowances position.