Build Magazine June 2015

Build Magazine 49 Regulation way back to £25,000, so there has never been a better time to claim for capital allowances. What are the benefits? Accurately assessing qualifying items and processing an effective claim will in many cases form the basis of a substantial write off against the profits of a business, resulting in a lower tax charge or in some cases a cash rebate for previous years. Individual claims can sometimes amount to as much as 35% of the value of a freehold i.e. £350K of tax relief for a building bought for £1m. Capital allowances can also add to the monetary value of a commer- cial property. This is great news for sellers in what is still a slow market for commercial freeholds. Case study An investor buys a block of flats. The vendor confirms they have claimed substantial amounts of allowances in the past but neglects to fix a transfer value or include any capital allowance related terms in the purchase agreement. Fortunately, the investor is well advised and with the aid of a tax specialist, post completion makes a representation to a tax tribunal to fix a transfer value. A transfer value is fixed that puts the investor in a very strong position and triggers a substantial and unexpected (and certainly unwelcome) tax charge on the vendor. So if you are buying, selling or simply holding on to a commer- cial property, a review by a capital allowances tax specialist in this field could save you tens, perhaps hun- dreds of thousands of pounds.