Capital Allowances on Property Expenditure

Capital Allowances are tax allowances that are available on certain categories of purchases made by companies, sole traders and partnerships . An area that is often overlooked is that there are sometimes significant capital allowances available on commercial property expenditure. Companies and individuals can use these allowances to reduce their tax liabilities on both rental income and trading profits.

Many tax payers do not claim the correct level of capital allowances that they are entitled to because in order to identify these allowances you require combined surveying and tax knowledge. The capital allowances legislation also does not define exactly what can be claimed therefore a thorough knowledge of relevant tax case law is also required.

Unlike many accountancy practices Bracey’s Accountants Capital Allowances team have this combined expertise which helps us to identify the more unusual items of qualifying expenditure which can sometimes be overlooked.

Opportunities

There are two main opportunity areas available;

1.   Acquisition of commercial property

Capital allowances are identified by undertaking a just and reasonable apportionment of the purchase price paid. This is essentially a valuation exercise and also requires researching former owner history to determine if any restrictions apply.

2.  New capital expenditure on commercial property

Capital allowances are identified by analysing the actual costs incurred and applying the relevant capital allowances legislation to extract as much qualifying expenditure as possible.  Relevant expenditure includes;

• New Build
• Extensions
• Refurbishment
• Fit outs
• Contributions
• Dilapidations

Initial Review

In order to determine if capital allowances can be claimed we offer a free initial review. This review will include researching a taxpayers entitlement to claim capital allowances and an estimate of the additional tax saving available.

In some cases information can be incomplete, however due to our teams surveying expertise we are able to undertake quantity surveying assessments to help justify claims to HMRC.

To discuss Capital Allowances opportunities further please contact Pete Bracey – This e-mail address is being protected from spambots. You need JavaScript enabled to view it This e-mail address is being protected from spambots. You need JavaScript enabled to view it or call us on 01438 727141.

We provide a free initial consultation on a no obligation basis.