Lovin’ this article, but need more advice on your tax affairs?
Get in touch today.
Capital Allowances (CAs) should be at the forefront of all commercial property owners minds. Generally, such claims will be in relation to so-called property embedded fixtures and fittings. In other words, fixtures and fittings acquired with the building and / or certain expenditure on refurbishment of a property.
For more information on CAs generally please contact us.
It is possible for a valid claim to be made resulting in the benefit of a historic CA claim being offset against two years’ worth of tax liabilities. This may take effect as a repayment from HMRC and / or a reduction in the next years tax bill.
Under general principles, a claim should be made on a ‘real time’ basis. In other words, when it is clear that a commercial property owner acquires a commercial property and incurs expenditure on the property embedded fixtures and fittings.
Planning for 2015/16
As we are now a couple of months away from the 2015/16 tax year you will find some quick tips on making a claim (if you are a property investor) or helping a client make such a claim:
The ‘perfect storm’?
Historically speaking, The Annual Investment Allowance (AIA) is at its highest ever level (£500,000). In the 2015/16 tax year the ‘perfect storm’ for a valuable and attractive CA claim would be for a property purchased in 2013 and 2014.
Why is this a ‘perfect storm’? Well, such circumstances would allow for both a historic claim and the use of allowances of up to £500,000.
For example, an office that was purchased for £250k may have £62.5k of CAs in respect of the inherent fixtures and fittings. These can be written down in full if there is a balance of AIA available.
As such, a CA claim on this bases would be worth £25k, assuming they were 40% taxpayer.