Announcements on rule changes are set to be made in early December for change in early 2012 that will reduce opportunity in respect of claiming capital allowances– you should review your portfolio of properties, now.
Who can claim?
Any company or business that has purchased property as a fixed asset may be eligible. The capital allowance regime allows for tax relief on certain capital expenditure. There is an opportunity to make claims for capital allowances in respect of a category of expenditure called 'integral features' if there are eligible integral features in the building acquired. Integral features include electrical systems and cold water systems and the application is therefore wide.
Claims can not be made for residential property though common parts should not be ignored.
How does it Work?
For properties purchased by a company on or after 1 April 2008 (or 6 April 2008 for an unincorporated business) and which were owned by the seller prior to those dates, the seller was not able to claim capital allowances on certain categories of what are now integral features. Consequently it is open to the purchaser to establish if there is qualifying expenditure and if so make a claim. These claims can be significant.
Implications
The effect of establishing additional claims for capital allowances feeds through directly to reduce a significant cost for property investors, namely tax charges.
Businesses are often put off from investigating these opportunities with a perception that they will be time consuming. In reality a physical inspection of the relevant buildings and a review of the contractual documents at acquisition is a good starting point and often sufficient to establish a claim – the opportunity really should not be overlooked.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
