Capital Allowance Service
Whether you are thinking of buying, building, or refurbishing a commercial property, this is a significant business decision, and you will want to get good value from your investment.
Capital allowances give property owners valuable tax reliefs, and are an important way of securing tax savings for your business. Capital allowances are vital to consider if you plan to sell a commercial property. By making sure the purchase is tax effiicient for your prospective buyer, you can maximise the value you receive on the sale. If you are buying a commercial property you need to include capital allowances fixed value agreements in your negotiations with the vendor.
Bricks and mortar elements of buildings are not claimable against profits. However, many types of fixtures and components within the build, such as electrical systems and lifts, are within the definition of “plant and machinery” and thus do qualify for tax relief. These costs are often not separately itemised on invoices. By leading a detailed investigation of how a contract build price, including variations, has been put together we can help you to identify these less obvious qualifying items and improve your claim for capital allowances. Illustrating the potential proportion of qualifying costs as a percentage of total purchase price including land, a modern data centre might include up to 35% of “plant” within the total build cost.
Air conditioned offiices might include up to 25% of qualifying plant. We approach this work by talking with and listening to you, visiting your sites, taking photographs, liaising with your internal accounts function and sitting down for line by line discussions with your Contractors and Quantity Surveyors. If you are buying or selling a building, the seller and buyer need to agree a fixed value for qualifying costs included in the transaction, and the purchaser cannot claim capital allowances unless the seller has put these costs through their own tax computation. Pension funds and charities can also protect the future value of commercial properties by making elections to fix the value of capital allowance qualifying costs.
Main Advice Areas
- New build projects: we work with you to make sure that qualifying expenditure is fully identified.
- We then help you to submit detailed reports and inventories as part of a claim to HMRC.
- For properties acquired before April 2014, it can be possible to make retrospective claims to identify previously unclaimed qualifying costs.
- Buying / Selling: we work with either side to make sure the capital allowance position is optimised.
- Rental properties: a capital allowance review can identify qualifying spending on plant and machinery in communal areas