Advice & Best PracticeFeatures

The unclaimed tax savings hiding in properties

By Sam Moore, Incentives and Reliefs Manager and Mario Minchella, Incentives and Reliefs Manager 

With the chancellor’s newly implemented super deduction and the temporary extension of the annual investment allowance, a lot of noise has surrounded Capital Allowances over the last few years. 

And whilst it’s great to see that more focus is centralising on the relief, many are still left in the dark about the significant amount of tax relief that they could be sitting on – especially commercial property owners. 

It doesn’t matter how long you’ve owned the property for, or whether you own the building as a company or privately, as long as it’s a commercial property the relief could be worth more than 40% of the cost of the building. 

What are Capital Allowances and how do they work? 

Whether it’s a new construction, extension or refurbishment, Capital Allowances are available to anyone who is incurring costs on their properties. The rates of allowances stretch from 2%-150% of the expenditure incurred in the same period, so it can be a lifeline when it comes to easing your cash flow. 

Navigating your way through the eligibility criteria can be a daunting task, and identifying qualifying assets isn’t always a straight forward process. With this in mind, we’d always recommend consulting an expert on the matter, to make sure you’re staying compliant whilst also maximising the value of the relief. 

Unlocking embedded Capital Allowances 

Like many other business owners, you might not be considering refurbishing, extending or building during the current economic climate. But if this is the case for you, all is not lost. 

You could already be sitting on thousands of pounds worth of Capital Allowances embedded within your property, from air conditioning to internal doors, to lighting throughout the building. As long as the assets still belong to you as the taxpayer, historic claims can be made. 

Oftentimes when reviewing historic claims, additional value from your properties being uncovered too. We’ve seen time and again instances where claims haven’t been truly maximised. Whether it’s due to a lack of awareness, not being taxpaying when the expenditure was incurred, or thinking that all of the allowances have already been claimed. 

So, if you’ve incurred expenditure on the acquisition, construction, or refurbishment of a property in the past, it could be well worth exploring your portfolio retrospectively. 

Surveying your property and assets 

Whilst most advisors and businesses will be aware of Capital Allowances in some way shape or form, relief for commercial property is a highly specialist subject matter. Meaning that it requires an expert eye to comprehensively survey your assets in order to unlock to true value of the claim. 

A Capital Allowance expert will come out to visit your property, undertake comprehensive survey of your property and assets and will gather all of the necessary information to maximise your claim. The likelihood is that if your advisor hasn’t done so, not all of the allowances you’re entitled to will have been claimed. 

The value of finding the right advisor 

The best way to understand the true value of the relief is to speak to a Capital Allowances advisor about your property – they will soon be able to identify and expose areas which you may not have realised were eligible for relief in the past, to help maximise the value of your claim. 

By Sam Moore, Incentives and Reliefs Manager and Mario Minchella, Incentives and Reliefs Manager

Sam Moore works with businesses across the country, from a variety of different sectors and industries, helping them to maximise tax reliefs available, in turn supporting them with their cashflow. He specialises in tax incentives and reliefs, including Patent Box, Capital Allowances and Land Remediation Relief. 

Mario Minchella specialises in Capital Allowances and Land Remediation Relief. He works with business owners from a range of different industries, across the UK, helping them to maximise the corporation tax benefits of investing in land, property and assets.

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