What’s needed to build a robust claim?
Each case is different, however, we are keen to show you that it’s not just accountants, surveyors, or lawyers’ expertise individually that make these claims successful, it’s when these come together that we can build a robust claim.
The foundations for forecasting a potential claim involve significant research and due diligence backed by a wealth of knowledge. As each case can differ, a template approach can not be applied however, we have set out a selection of documentation that helps build a robust approach to claiming. The following list of documents often plays an important role in establishing whether a claim is possible.
The following list plays an important role in establishing whether a claim is possible:
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Legal Property Documents
- Purchase Contract
- Completion statement
- CPSE.1 Enquries
- Section 198 Election
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Accounting Documents
- Full Accounts
- Tax Returns
- Fixed Asset Registers
- Repairs & renewals
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Property Documents
- Tenancy Agreements
- Floorplans
- History of Ownership
- Property Usage
The Section 198 Election
A Section 198 Election isn’t always applicable to a property transaction. In the event is does apply, this is the legal document that should clearly set out the Capital Allowance position in which both Seller and Buyer agree.
To be valid it must:
- Be signed by both Buyer & Seller
- Be submitted to HMRC within 2yrs of the property completion date
Confirming: - Name of Buyer & Seller
- Information sufficient to identify ‘Plant & Machinery’ embedded within the property
- The value of Capital Allowances fixed by the election
- Particulars of legal intent required
- Both parties tax district
We often find invalid Section 198 Elections within property contracts. This is typically due to templates being used. A Section 198 Election for £1 entirely restricts the buyer from claiming General Pool and possibly Special Rate qualifying items embedded within the property.
Commercial Property Standard Enquiries – CPSE.1 v3.8
This is not a mandatory document, however, is used on most commercial property transactions and is very useful at revealing the Sellers’ understanding of Capital Allowance legislation and how they intend to treat capital allowances. This really can hold a wealth of information even when there’s very little information noted (!).
Section 32 in this document specifically relates to Property Capital Allowances. There are 11 key questions that the Sellers replies provide key indicators. Question 11 asks the Seller to note their Capital Allowance expert and contact details.
For those buying commercial property, this is a crucial document and once received, would help determine how the subject of Capital Allowances would be applied in order to protect the buyer’s position and satisfy legislation.
For those selling commercial property, this document also helps protect their position and set out their intentions.
Why are these documents needed?
The due diligence applied to reviewing these documents helps determine the ownership and claims history – both are demanded by CAA2001 S185.
Click below to have a look at some eye-opening case studies:
Case Study 1 – Securing a claim through the S198 – an example of the amount of savings that would have been missed if the S198 hadn’t been completed and the capital allowances were lost for the buyer.
Case Study 2 – Legal action taken – An example of the consequences of overlooking the need to have knowledge of the new legislation.
Let us guide you
With our 20 years of experience in this sector, we are here to help guide you through the technical side by ensuring claims are completed legally and thoroughly. Please get in touch to lean on us for advice.
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5 December 2024What Are Qualifying Activities for Capital Allowances?
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3 December 2024How Do CARS Assess Capital Allowances?
At CARS, we assess capital allowances and offer businesses and property owners a significant opportunity to reduce their tax liabilities by deducting qualifying capital expenditures. Here at Capital Allowance Review Service (CARS), we provide a thorough process to optimise these claims. Our goal is to...
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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.