If a property was purchased prior to April 2014, there is no time restriction for retrospective claims which means that you can start reviewing your property costs today and potentially unlock a significant tax benefit.
If a property was purchased after April 2014, there could be a 2-year time deadline from completion to claim these allowances. However, this 2-year deadline doesn’t always apply as it’s subject to a number of factors relating to the purchase. We actively encourage all transactions to be reviewed as quite often capital allowances can be claimed after 2 years have passed.
If you have carried out property improvements to a freehold property, or even a property that’s leased, there is no time restriction in claiming.
We would encourage you to complete a review if you answer yes to both of the following conditions:
- Have you spent significant capital buying and/or improving a commercial property that is in use for the purpose of trade or rental business?
- Is the entity that spent the capital paying or liable to UK tax i.e., an Individual, a Company, Partnership, Overseas Landlord, etc?
Capital allowances claims are ideally suited to be dealt with on a stand-alone basis separately to other tax matters and we work alongside other advisers without any conflicts of interest.
Although we have operated for many years with testimonials on our website, we have recently started publishing Google Reviews. This is proving to be a great way of giving clients and advisors some reassuring reading.
We maintain that a “no win no fee” fee structure with no upfront costs gives clients the peace of mind that they are not exposed to any risk in progressing a review. It’s just as important that both the long-term and short-term benefits are considered when reviewing the client’s tax profile and cashflow. This is completed at the start of our process as to how the tax benefit is crystalized through capital allowances can differ from one case to the next.
The majority of our clients are not tax experts therefore most initially have some uncertainty/nervousness about our expertise and quite often think it’s too good to be true. This is why our approach over the past 19 years has been to support advisors across the UK creating trusted relationships. We look to confirm, with certainty, that a claim is possible before progressing the practicalities of the process. This confirmation is shared with clients and their advisors to ensure all parties are comfortable with our approach.
Confirming proof of expenditure can be done in a number of ways. Not having detailed invoices is one of the key reasons capital allowance Review Service is in operation. Our process creates the detail required in a way that satisfies HMRC protocol.
Depreciation and capital allowances are not related therefore have bearing on a capital allowance review.
Capital allowances are part of standard business routines and therefore claimed each year against cost you incur to operate. HMRC does not take issue with Property Embedded claims on the basis we adhere to guidelines and the legislation applicable to each case. WE maintain an experienced multidisciplinary team of experts ensuring a solid track record and reputation are protected.
There’s no doubt accountants have an established routine for assessing capital allowances and therefore it’s important to stress that we’re not questioning their or your ability. We look to enhance the level of capital allowances claimed by introducing additional disciplines that add value to the accountant’s work. For example, a survey is completed on the property to identify items that are not visible within the paperwork and sit within Land & Buildings on the Balance Sheet (not Fixtures & Fittings). Stage Payments for leasehold improvements or property builds are a good example of where our process creates the required detail to maximize Capital Allowances.
The most common misconception is the view that any savings achieved by claiming capital allowances will be cancelled out later by an increased chargeable gain (if the property is ever sold).
This is not true. Section 41 TCGA 1992 specifically provides that it is not necessary to deduct any capital allowances from the cost of an asset for capital gains purposes, so it is not possible for a capital allowance claim to create or increase a chargeable gain. capital allowance claims on Land & Building costs does not reduce the Balance Sheet value.
The changes in 2014 effectively changed the way in which capital allowance claims against the majority of commercial property transactions were calculated and also enforced a time deadline to claiming. This meant that the tax benefit available was now exposed to being lost and put additional pressure on those involved in property transactions. Solicitors and accountants were forced to include capital allowances into their routines and take a proactive approach to avoid the risk of negligence claims.