Capital allowances tax relief on commercial properties

Identifying whether you’re likely to qualify for this very valuable form of tax relief couldn’t be easier. You simply need to be able to answer ‘yes’ to the following two questions. If you can, then we’ll almost certainly be able to secure you a significant tax benefit because of unclaimed capital allowances.

  • Do you own a commercial property either in your own name, in partnership with someone else or through a limited company?

  • Is the owner of the property a UK taxpayer?

Your capital allowances claim is calculated based on the value of the fixtures contained within your property and we will establish this for you. We will not include items that your accountants have already claimed for, but it’s highly unlikely that they will have done so.

We’ll only charge a fee once we have identified previously unclaimed allowances and, if we fail to find £50,000 of these then we’ll give you our report, free of charge, for you and your accountants to submit to HMRC.

So, there’s nothing whatsoever to lose. And the chances are that we’ll be able to secure a significant tax repayment for you, with further reductions in your tax liabilities every year in the future, so long as you continue to own the property. To find out how big a tax benefit you could be eligible for, call us today.

There’s also a strong call to action here if you’re thinking of selling a commercial property in the future. New legislation came into force in April 2014 which effectively means that you must value the fixtures in your property prior to sale and agree that value with the buyer. If you don’t, the buyer and all future owners will be barred from claiming any further capital allowances in respect of the fixtures sold.


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“When you receive a repayment of income tax of £48k that you had no idea was coming, you can’t help but celebrate!”

Client

“I’ve used complex film schemes in the past and wish I’d known about the solutions offered by Niche.”

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Client Case Studies

Property owned personally by a Higher Rate taxpayer

  • Property purchased in 2011/12 for £675k

  • Fixtures identified with a value of £113k

  • Immediate tax repayment to the client of £48k
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Mr Jones earned a salary of £130,000 in tax year 2011/12. He had purchased a commercial property during that tax year for £675,000 on which no capital allowances had been previously claimed. He let the property from June 2011 on a 5-year lease and his rental profits for tax year 2011/12 were £21,250. The total amount of Income Tax suffered by Mr Jones in 2011/12 had been £53,625, of which most of it had been deducted through the PAYE system via his monthly salary payments. He’d also had some tax to pay on the rental profits under Self-Assessment but that is included in the £53,625. Our work uncovered £113,480 of fixtures qualifying for capital allowances, all of which were claimable by Mr Jones in 2011/12. The result was that his tax liability for the year dropped from £53,625 to £6,059. Because Mr Jones had already paid the tax of £53,625, he received a repayment of tax of the difference, banking a cheque for £47,566. In fact, the repayment was slightly higher than this because of the interest added by HMRC. Until we made him aware of this, Mr Jones had no idea whatsoever that he had made what was effectively an unnecessary and gratuitous donation of almost £50,000 to HMRC. He used the repayment as a deposit on a second commercial property, on which he made another capital allowances claim.”

Property owned by a trading company and used within its own trade

  • Taxable profits of £750k

  • Property purchased in 2014/15 for £1.6m

  • Fixtures identified with a value of £243k

  • Corporation tax liability for 2014/15 reduced by £52k
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This company (we can’t tell you the name) will generate taxable profits of around £750,000 during its accounting period ending on 31 March 2015. On this, its corporation tax liability would be £155,625. However, the company bought a commercial property for £1.6m in June 2014 from a pension fund. Because the purchase was subject to the new legislation introduced in April 2014, we had to carry out a valuation of the fixtures prior to purchase and the pension fund (being a non-taxpaying entity) agreed to allow the buyer to utilise the whole value for a capital allowances claim. We discovered fixtures with a value of £243,200. The company has little other capital expenditure planned for 2014/15 and so the whole of the £243,200 will be claimed as part of its £500,000 Annual Investment Allowance. The result will be that the company will be able to deduct £243,200 from its £750,000 of profit to reduce the amount on which it will need to pay corporation tax to £506,800. Its corporation tax liability for 2014/15 will be £103,945. Bearing in mind that it would have paid £155,625, this represents a reduction of £51,680 in the amount of corporation tax it will have to pay on its 2014/15 profits. The directors are, to say the least, very happy.