Capital Allowances Advice for Professionals and Owners
Our expert team is proud to provide a range of specialist tax services exclusively for the commercial property market. We focus on ensuring that commercial property owners benefit from optimum tax relief and we do this by supporting those who advise them through the whole process of buying and selling commercial property, and everything in-between.
We have extensive hands-on experience, a wealth of knowledge and an in-depth understanding of UK taxation which enables us to deliver the very highest quality advice to:
• Property Agents and Owners
Still one of the most legitimate forms of tax relief available, the Government’s changes to the Finance Act 2012 (FA 2012) have left many confused about what the process means for Capital Allowances. Who can claim remains the same, but the degree of flexibility as to when, and what, to claim has evolved.
Without specialist knowledge and expert guidance, you or your clients may not understand the implications of not taking action, and will be in real danger of losing their entitlement to claim tax relief – now, and in the future. But our dedicated team is here to help guide you through the latest legislation and support you in getting results for your clients no matter what side of the commercial property transaction they’re on. We’ll help you with everything relating to:
There is now a fundamental question when commercial property is sold – will the valuable tax relief be retained by the vendor, shared between the parties, passed entirely to the purchaser or unintentionally lost? All of these are real outcomes, and it is essential that clients and their advisers are fully informed.
Whether your client is buying or selling commercial property, you probably don’t see capital allowances as your problem. That may ultimately be right, but only if proper steps are taken to ensure that the potential risks are managed correctly.
Heads of Terms & CPSE.1 Interpretation
Contract Clauses & Negotiation
We offer full support for solicitors throughout the purchase and sale process, avoiding last minute delays and managing the whole process to eliminate risks for the professional adviser. This starts with Heads of Terms to determine the intent and coperation of seller and buyer in relation to capital allowances. This is followed by the interpretation by the buyer of the sellers CPSE replies to help determine entitlement or any restriction for the buyer or underpin the position of the seller.
Contract clauses in relation to capital allowances are often cut and pasted from approved online resources. These resources can add unnecessary complexity in their explanations. Bespoke drafted contract clauses something, and protect both transacting parties' tax interests in terms of intent, cooperation and risk of the keeping or sharing of capital allowances. Clear intent and cooperation can only assist negotiation rather than hinder it.
Due Diligence & Entitlement
Meaningful s.198 Elections etc
Capital Allowances has always played an important role in a property transaction, but at the higher end of the market. In recent years its value has been improved in the context of the recession and the Government tax recovery plans to offset the national debt of £1Trillion. Since April 2014 capital allowances must actively be addressed in every transaction. If Capital Allowances are not dealt with correctly property owners can lose valuable tax relief. By being involved and being aware of this tax relief is of real benefit in tax recovery, improving the sale or purchase price of a property or an improvement in net yield.
It is crucial that specialist advice is sought to provide specialist valuations on the key elements in a building that are allowable. Many investors are unaware or are incorrectly advised of the potential benefits like improving investment yields or the marketability on a sale.
Finance Acts and the Capital Allowances Act 2001 determine the criteria for most claims. Addressing the legislation alongside purchase contracts, price apportionments, historic replies to CPSE.1, prior joint elections and schedules of plant and machinery can provide the diligent detail needed for entitlement to claim. Without this diligence, and disclosable information, claims will be at risk of enquiry from HMRC and/or VOA.
Cut and pasted elections in SPAs are often meaningless as they pay no heed to Heads, CPSE.1s, Entitlement or Diligence. Often unaccompanied by contract clauses and simply added as part of the Schedules, the placement is nearly always confusing and almost never reflects the true capital allowances posistion for either party. The election seems to be the last thing to dicuss and can then be perceived to be a 'stopper' for the deal. Properly considered and understood, this can be prevented in nearly all cases.
To protect your clients from delays in transactions or financial detriment, and to further support your own relationship with them, please contact us at any time and we’ll support you every step of the way to help you ensure that their investments are protected.