Understanding Integral Features
Integral features, in the context of tax regulations, relate to specific components of a building that are considered integral to its operation. These components fall within a unique category. Sitting somewhere between “plant and machinery” and “commercial building” expenses. It’s important to note that they are distinct from typical plant and machinery assets. Integral features are subject to their own set of rules and rates of capital allowances.
The Introduction of Integral Features Capital Allowances
Integral Features were Introduced in April 2008
The notion of capital allowance relief on integral features was introduced in April 2008, for both corporation tax and income tax purposes. Before this alteration, certain assets like cold water and certain electrical systems were often excluded from plant and machinery allowances. This was due to the specific regulations outlined in The Capital Allowances Act 2001 (CAA01). The legislation was introduced partly to offset some of the benefits lost by the phasing out of Industrial Buildings Allowances (IBAs).
With the introduction of the new provisions in 2008, all integral features were treated as part of the plant and machinery category. This shift eliminated the need to differentiate between various types of cold water and electricity systems. Streamlining the process for businesses to claim their entitlement to capital allowances.
Assets Qualifying for Integral Features Capital Allowances
These encompass a range of vital building components.
According to CAA01/S.33A, the following items are considered to qualify:
- Electrical systems
- Lighting systems
- Cold water systems
- Water heating systems
- Air and space heating systems
- Powered ventilation systems
- Air and space cooling systems
- Air purification systems
- Moving walkways
- External solar shading
- Other long-life assets
It’s important to note that these criteria apply to any floor or ceiling that forms part of the installation of such systems.
Eligibility for Capital Allowances on Integral Features
Qualifying for capital allowances on integral features isn’t limited to a specific type of business entity
Whether you’re a sole trader, a partnership, or a limited company. Or any other form of business subject to income tax or corporation tax, you have the opportunity to claim these allowances. However, eligibility hinges on factors such as incurring capital expenditure and having a vested interest in the relevant property.
Claiming Capital Allowances on Integral Features
Understanding the process of claiming capital allowances on integral features is vital. The approach to making a claim significantly influences the amount of tax relief you’ll receive. Factors that influence the relief and claimable amount include the asset’s condition (new or unused). Plus, the purchase date, and the availability of specific allowances.
Seeking Expert Advice
Integral features capital allowances present a substantial opportunity for businesses and property investors in the UK to enhance their tax savings. Navigating the intricacies of capital allowances regulations can be complex. If you have questions or uncertainties, don’t hesitate to get in touch with our team of capital allowances specialists. We’re here to provide clarity, ensuring you make the most informed decisions for your business’s financial growth. Call us at 0330 174 1339 or email us at [email protected]
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Our expert team are here to help answer any of your capital allowances questions or enquires you have about your commercial property.