Archive for the 'Property' Category

Unclaimed Tax Relief on Commercial Buildings

It is highly likely that businesses have understated the level of available tax relief and are missing out on cash tax savings in connection with expenditure incurred in acquiring, constructing or refurbishing buildings or property over the last 10 years or more.

Capital Allowances are a valuable form of tax relief available to anyone buying, building or refurbishing a commercial property.  They are a tax adjustment only and have no effect upon the profits shown in a company’s financial accounts or on the market value of the property.  It is routine for businesses to claim capital allowances for movable fixtures and fittings in a shop, for plant and machinery in a factory or for furniture in an office.  They cannot claim such allowances for the immovable fabric of the building, however, which is viewed as a non-depreciating asset.

The opportunity that is often overlooked is the grey area between movable and immovable assets.  There are often significant Capital Allowances embedded in and integral to the fabric of the building that go unclaimed.  This because Capital Allowances claims, particularly relating to buildings, are a highly specialised subject matter requiring expert knowledge of property design, construction and construction costs, mechanical and electrical installation costs, land values and apportionment and tax matters.

At Balance Accountants we have developed a service working with capital allowances experts to identify those embedded capital allowances and create significant additional tax allowances going back up to 15 years.  As the service is provided on a no win, no fee basis, there is nothing to be lost by contacting us.  The tax savings can be generated for individuals, partnerships, LLP’s and limited companies who own a commercial property, as long as they are UK taxpayers.  Examples include Care Homes, Caravan Parks, Office Blocks, Student Apartment Blocks, Leisure Parks, Cinemas, Day Nurseries, Car Dealerships, Veterinary Practices, Medical Practices, Hotels, Health Centres and Garden Centres.

Contact us here if you would like to learn more about this service and how it may apply to you.

Have you claimed back all of the tax relief you are entitled to?

This post was created by Ashley Barrowclough on behalf of the Balance Team.
Please leave any comments below.

Furnished Holiday Letting Rules with us a little longer

The favourable Furnished Holiday Lettings tax rules are to be with us until April 2011 at least.  Rather than continue with the withdrawal of the rules proposed by the previous Government, the Chancellor has cancelled the proposals.

However, the Government is to publish a consultation document over the summer about plans to change the tax treatment of furnished holiday let property from April 2011. The consultation will look at issues that:

  • ensure the Furnished Holiday Letting rules apply equally to properties wherever they are in the European Economic Area;
  • increase the number of days that qualifying properties have to be available for, and actually let as commercial holiday letting; and
  • change the way in which Furnished Holiday Letting loss relief is given.

We will know more about future changes as the consultation progresses.  In the meantime there are a few things to remember:

  • Holiday accommodation in the European Economic Area that meets the conditions can be classed as a Furnished Holiday Letting, and perhaps save you tax.  The conditions include the property being actually let for at least 70 days a year, and not for more than a continuous period of 31 days to the same tenant.
  • Losses arising from Furnished Holiday Lettings can be set against other income.
  • Should the property be sold then it may be possible to
    a) rollover the gain into a further property or business asset, or
    b) reduce the gain by Entrepreneurs Relief

If you have any queries about your circumstances or the changes please do not hesitate to contact us.

Extract taken from our 2010 Summer edition Tax newsletter – if you would like to subscribe please leave your details here.

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