Before any purchase takes place you should always take advice as tax savings are there to be made. In many cases the contract drawn up by solicitors will need to be worded carefully to ensure tax savings can be considered.
The Capital Allowances Act 2001 entitles a purchaser to claim tax relief in respect of the proportion of the expenditure that relates to eligible assets – known collectively as fixed 'plant and machinery'.
Here are a few key points:
• Capital allowances are available on second-hand property.
• Optimising capital allowances improves cash flow.
• Failure to comply with the rules can mean that qualifying expenditure is nil.
Capital allowances give tax relief for property owners. There are several types of allowances, applicable to different asset categories. The principal forms, found in all commercial properties are plant and machinery and integral features.
All too often, capital allowances are left unclaimed for several years. The reason for this may be a lack of awareness (by both clients and their advisers). This is not the case at Torr Waterfield, so whenever you are thinking about buying commercial property contact your account manager before any purchase takes place so we can ensure you don’t miss out on potential tax savings.
Mark Cunnold, Accountant & Client Manager