Three companies within a globally trading consumer goods group had acquired 275-year leases on a complex of new warehouses and logistics centres in northern England.
Developed by two other group companies and held as trading stock, the three buildings, totalling 60,000 square metres, had not had capital allowances claimed. Each of the steel portal framed buildings on a single strategic site includes integral offices and security gate houses, providing self-contained secure locations. Access to each building is via a bank of roller shutter doors.
The comprehensive fit outs include heating and ventilation systems, sanitary ware, and hot and cold-water systems. The properties benefit from substantial banks of motorised vehicular access and loading doors with dock levellers. Automatic sprinkler systems completely cover the warehouses.
Each building has a general electric supply and distribution, three-phase supply for high-load needs, plus general and emergency lighting, fire detection, security systems, and telecommunications and data connections.
There is also rainwater harvesting, solar shading, EV charging, removable fire crowd control equipment, and passenger and goods lifts serving 3 floors, plus destratification fans.
WHY DID SIX FORWARD GET INVOLVED?
HOW WE HELPED:
The three entities that owned each building were being sold to a third party. The aim was to take advantage of any unclaimed allowances for relief across the group, offsetting any losses created by the capital allowances against profits elsewhere. Any allowances that couldn’t be utilised in this way would be available to the purchasing company in the normal way, benefitting the new shareholders. Unusually, the buyer appointed auditors (a Big 4 firm) to assess multiple aspects of the deal, including close scrutiny of the capital allowances analysis prepared by SF. The auditors had raised the issue of unclaimed CAs, which should be addressed before sale completion.
The background to the development was also complex. SF also had to liaise with multiple client personnel as well as the client’s accountants. The extensive fit outs for all 3 buildings demanded deeply detailed examination, analysis and reconciliation by SF ahead of sale completion. This was completed to a very tight deadline with accuracy of the precise allocation of allowances being paramount.
RELEVANT LEGISLATION FOR THIS CASE
CAPITAL ALLOWANCES ACT 2001 S11, S15, S33A, S181, S187 A & B, S270AA, S562
WHAT WAS THE OUTCOME?
Analysed expenditure of £90,617,792 was allocated as follows:
