Capital Allowances are a valuable form of tax relief available to commercial property owners who have incurred expenditure on various fixtures and fittings.
Capital Allowances are available in two situations. Firstly when a commercial property is purchased for occupation or investment purposes and secondly when a new commercial property is built or fitting out/refurbishment works are undertaken.
The rules relating to Capital Allowances are typically very complex but in simple terms they are costs that a business incurs that can be reclaimed against tax.
The type of items that can be claimed for is wide ranging but includes heating/cooling systems, security and lighting. It is basically expenses that are incurred after a property has been plastered and are normally ‘moveable’ items.
Interestingly if a landlord contributes financially to the tenants fitting out of a vacant unit this may allow the owner to claim Capital Allowances, but only if described correctly.
Furnished Holiday Lettings can also qualify for Capital Allowance claims.
It is estimated that over 90% of all commercial property and furnished holiday lets could be entitled to tax relief of this nature and often the savings can be significant. Many commercial property owners are either unaware or have not yet claimed the full level of Capital Allowances that they are entitled to under UK tax law. It is important to note that Capital Allowances are not a tax avoidance scheme or loophole but permitted by statute to encourage owners of business premises to improve their property.
The good news at present is that claims can be made retrospectively and there is no time limit for submitting a claim although this is currently under review by the Government. Please therefore contact me on 01604 456591 if you think that you could be eligible for these tax savings.
The initial survey to identify the items that can be claimed against can often be carried out at no charge and the specialist firms who deal with these types of claims can operate on a no fee basis unless a successful claim is made. The only limitation being that the original acquisition costs should be at least £250,000.
Steve Petty
Commercial Property Solicitor
0845 003 5639
This blog is not intended to constitute legal advice, nor is it intended to be a complete and authoritative statement of the law, and what we say might be out of date by the time you read it. You should always seek legal advice to confirm whether or how any information in this article applies to your particular situation. We offer a free telephone consultation to discuss your particular circumstances.