As a property investor or owner you will you have encountered the complex issue of capital allowances in one way or another. Unless you have sought the advice of an independent capital allowances advisor, it is likely that you have either ‘parked’ the capital allowances issue ’till you have more time to get to grips with it, or you have left it to your accountant to deal with. If so you could be making a costly mistake.
Capital allowances is a complex subject. Whilst accountants and some solicitors have a basic working knowledge of capital allowances, they normally don’t have the required skill-set along with the in-depth and up-to-date understanding of capital allowances practice and legislation to realise the full tax saving potential. Obtaining the correct, timely capital allowances advice could result in a claim of up to 45% of the purchase expenditure of property, or significantly more if constructing or refurbishing property.
HCCA offers the combination of years of experience along with the skill-set of quantity surveying, tax and valuation that will realise the full tax saving potential for property investors.
Capital Allowances – How do They Work?
Significant capital expenditure is incurred when a company or private individual buys, constructs or improves commercial property. Whilst the costs of running a business can be off set against tax, this capital expenditure is not an allowable expense. Instead, capital allowances are given on certain qualifying elements of that capital expenditure. The main, the qualifying elements in a property are the embedded plant and machinery such as the heating and ventilation system, electrical systems, hot water, sanitary ware etc., but there are many more, all of which are based upon legislation, case law and legal tests.
In addition to the many different types of allowances that are available, there are also complex rules and legislation affecting the ability to claim these allowances. HCCA advises on all these complex issues, ultimately producing robust maximised capital allowances valuations for all situations that will stand up to HMRC scrutiny.
All types of commercial properties will attract capital allowances. Expenditure on offices, retail shops, industrial units, care homes, hotels, leisure facilities and furnished holiday lettings will all result in significant tax savings.
When purchasing a building HCCA also provides advice at transaction stage where a full capital allowances due diligence exercise and the structuring of the purchase contract could make the difference between large tax savings or the loss of all tax savings, especially following the introduction of mandatory pooling in April 2014.
The best time to take capital allowances advice is before you commit to purchase or construct a property, however if you have already built your property, or acquired property before April 2014, there are no time restrictions for claiming capital allowances, as you never lose the right to claim. If you have acquired property after April 2014, you may have been advised that you are too late to claim capital allowances due to mandatory pooling, this often is not the case however and each situation should be investigated thoroughly.
Free Initial Advice
If you are in the process of acquiring or selling a property, please contact HCCA to make sure that your solicitor has structured the contract correctly to safeguard the allowances.
HCCA welcomes the opportunity to discuss your specific circumstances and will happily provide an initial high level estimate free of charge and with no obligation.