Private school

Why Did Six Forward Get Involved?

We were asked to review this client’s historic purchase (2019) to see how we could help to maximise any tax relief that may be available. Due to the post 1 April 2014 purchase date and completion being more than 2 years ago, we had to consider the pooling and fixed value requirements set out by CAA2001 s187A and s187B.

Although such schools are generally of a charitable nature and exempt from claiming capital allowances, our input and provision of specialist capital allowances advice ensured that nothing was missed and as part of our ‘entitlement first’ approach, confirmed that the property owner on this occasion was a private limited company with entitlement to make a claim.

As the property had been owned and operated historically by a charity (not connected to our client), our client became the first owner with entitlement to claim against the property fixtures upon their purchase. Furthermore, the pooling and fixed value requirements could be ignored and a claim for our client was made against their full purchase consideration, on a just and reasonable basis, without restriction or need for a s198 election.

How Did We Help?

As well as legal entitlement to claim against property fixtures at purchase, we also considered property improvements carried out since 2019 to maximise the claim, while being certain to avoid double claiming of certain expenditure already identified and allocated by the accountant.

Due to the historic nature of the claim, annual investment allowances (AIAs) were unavailable but would otherwise have provided full write down of the allowances (up to £1m) in the year of expenditure. The allowances instead attracted write down at 18% and 6% per annum for main pool plant and machinery and special rate integral features, respectively.

What Was the Outcome?

Understanding the legislation, we were able to advise on the specialist areas that were unfamiliar to the accounting practice, provide certainty to the accountant and client, and mitigate any perceived risk of making a full and unrestricted capital allowances claim.

In terms of numbers, we identified around 29% of total expenditure as qualifying for capital allowances.

Relevant Legislation For This Case

Capital Allowances Act 2001 s. 11, s15, s176, s181 & s33A
Contact Us