Commercial Property Tax Saving

Posted on January 21, 2013

COMMERCIAL PROPERTY – TAX SAVING

OPPORTUNITY – CAPITAL ALLOWANCES

Many businesses and individuals owning commercial property continue to overlook the opportunity to make a tax saving by failing to identify unclaimed capital allowances. All commercial properties contain assets that qualify for capital allowances. Therefore, if you have built, bought or refurbished a property you may be entitled to significant tax relief in the form of unclaimed allowances.

Furthermore, in April 2012 new rules were introduced that have a major impact on how this relief is given, with strict time limits and additional requirements for submitting claims on property acquisitions. Failing to follow these new rules may result in the permanent loss of this valuable tax relief.

The new rules also have an impact on the sale of property. Planning is required to protect the tax relief already claimed by the seller or, if required, ensure that the benefit is passed on to the purchaser. Prospective purchasers often factor capital allowances into investment decisions therefore sellers may be able to realise added value by quantifying the level of allowances available to the buyer.

Depending on the type of property, between 10% and 30% of the purchase price can qualify for capital allowances. Qualifying assets include most heating and electrical installations, sanitary appliances, lifts, fixtures and fittings etc. Claiming allowances for these items, in a manner acceptable to HMRC, requires a specialist tax valuation of the property.

Garratts has teamed up with one of the UK’s leading experts in capital allowances to provide clients with access to specialist advice in this increasingly complex area. If you have acquired a commercial property or are currently considering purchasing or selling a property, please call us to discuss how capital allowances can be utilised to significantly reduce your tax liability.

For further details regarding capital allowances and commercial property, or if we can advise on any other issues regarding tax planning, please contact Garratts.

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