Property and Capital Allowances
28 December 2011
In the UK Autumn Statement, George Osborne announced the availability of new capital allowance reliefs in designated Enterprise Zones (Boston Blog 6 December 2011). The announcement may have been ignored by many commercial property owners, their properties being sited outside these designated areas. However, too often property owners are either unaware of the availability of capital allowances or consider that making a claim would be too complicated.
Although 100% first year allowances on qualifying plant and machinery are not generally available, commercial property owners should not underestimate the value of capital allowances. Even office buildings can contain plant and machinery with significant value (lift systems, heating, air conditioning, etc) which can assist owners to mitigate their tax liabilities.
For existing property owners who have not made a claim, all is not lost. It is possible to make a claim in relation to properties bought several years previously. However, the terms upon which the property was originally acquired can have a bearing on the availability of allowances and therefore we ensure our clients consider seeking specialist advice prior to the exchange of contracts.
Care should also be taken when disposing of a property. Through the use of a Section 198 election, vendors can ensure they retain some or all of the allowances on a sale.
If you are considering making a commercial property acquisition or disposal, we have significant expertise in property and would be happy to advise you to ensure the use of capital allowances is fully maximised.
Peter Vernon-Browne
Director
Boston Limited