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Commercial to residential conversion

Commercial to Residential conversion is where a once commercial building, owned and/or operated by a commercial entity, pension fund/charity or public body is converted to apartments for residential use by sale or lease. Ordinary property businesses, trades and furnished holiday lets (FHL) can qualify, subject to the provisions of the Capital Allowances Act 2001. Qualifying conditions must be met and there are specific guidelines when acquiring the first property,  acquiring in an existing property business, or switching status during or at the end of ownership. Other considerations must also be made to satisfy pooling and fixed value requirements.

Trades and professions can be considered as being a qualifying activity for plant and machinery capital allowances, but the rules of the Capital Allowances Act 2001 are complex. A properly formulated capital allowances claim ensures the use of the tax reliefs as they were intended.

The potential for capital allowances has increased since 2008 with the introduction integral features but loss of allowances is very real without a capital allowances specialist since 2014.

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