Capital Allowance Claims
The first point to consider is whether the seller of the property can, and has claimed all available capital allowances in relation to the property costs (to buy & improve).
- If yes, the first step is collating details of the items showing the calculations of the claims made. Along with confirming what value of Capital Allowances remain if any.
- However if not, it’s important to establish whether it’s possible to claim. Then calculate the value of unclaimed capital allowances by completing a full capital allowance review.
It’s important to consider whether any capital allowance claims on the property have been made in the past. This could mean that there are restrictions on the amount of relief that can be claimed by the seller and future owners.
It’s crucial the seller seeks advice to ensure the maximum level of capital allowances have been pooled before moving to the next stage of the process.
Retain or Transfer of Ownership
When a commercial property is sold, the ownership of any unused capital allowances associated with the property/ building can be transferred to the new owner. Meaning the new owner can claim the remaining allowances against their own tax liability. Thus allowing them to reduce their tax bill. Plus, potentially increase the value of the commercial property being sold.
However, whether any remaining capital allowances should be transferred to the new owner needs careful consideration as the seller may benefit from retaining any remaining capital allowances.
Important!
It’s crucial sellers seek advice to determine whether capital allowances should be kept or transferred/sold to the buyer.
It’s important to note that there is a specific process that is required in order for capital allowances to be transferred. This process will involve the completion of the Section 198 election. This must be completed within two years of the sale.
The apportionment of capital allowances is often negotiable and can be both simple or complicated depending on the situation. At CARS, our tax specialists navigate situations like this on a regular basis. Therefore, we’d recommend involving a specialist capital allowance advisor in this instance.
Find out more about a Section 198 election, what it is, and what is involved.
Specialist Capital Allowance Advice
At Capital Allowance Review Service, our team has experience and knowledge which makes them specialists in the field of capital allowance and tax. However many commercial property owners are unaware of the tax savings available in relation to capital allowances.
The process can be complicated, and it’s important to seek specialist advice. This ensures processes are followed correctly, and tax savings are identified with a successful outcome.
Whether you’re selling or buying a commercial property, we have an expert who can support you through the process of identifying any allowances that can be claimed. Ensuring that the transfer of the property is done correctly.
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Capital Allowances can be an important consideration when selling or buying a commercial property in the UK. It’s vital that you understand if there are any Capital Allowance claims associated with the property. Therefore, you are able to plan in the best way to maximise your tax relief and minimise your tax liability.
Discuss your situation with Property Capital Allowance Review Service today, to understand how our experts can support you. Contact us via form, email, or phone.
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Our expert team are here to help answer any of your capital allowances questions or enquires you have about your commercial property.