Capital Allowances, Tax Relief on Commercial Property

What Are Capital Allowances?

Capital Allowances are a tax deduction to allow for the wearing out of plant and machinery over time. Within buildings, the tax definition of plant and machinery includes fixed items, such as heating and cooling systems; electrical power and lighting, sanitary ware and lift equipment, as well as loose items such as tables and chairs.

The price paid for a property includes plant items that qualify for capital allowances and can be apportioned between qualifying and non qualifying assets. Savills can identify and categorise all the assets that will qualify for capital allowances to reduce the UK tax liability of the owner.

How Much Can be Saved?

The amount available will depend on the type of property, but uncovering tax relief of 25% of acquisition costs is typical. Tax relief in excess of 70% of any fit-out costs can also be achieved.

Are you aware that you may be entitled to substantial tax relief through capital allowances? Why give it away?

We know from experience that many owners and users of UK commercial property vastly underestimate the definition of plant for capital allowances purposes.

What Capital Allowances could you achieve?

Nursing Homes

What capital allowances could you achieve?

• Purchased units 25% - 35%
• Fit outs of retail unit 84%
• Refurbishment costs 70%

Hotels

What capital allowances could you achieve?

• Purchased units 20% - 44%
• Fit outs of retail unit 90%
• Refurbishment costs 80%

Warehouse and Industrial Units

What capital allowances could you achieve?

• Purchased units 10% - 20%
• Fit outs of retail unit 70%
• Refurbishment costs 40%

Computer Centres and Process Plants

What capital allowances could you achieve?

• Available Allowances 40% - 50%

Student Accommodation

What capital allowances could you achieve?

• Purchased units 25%
• Fit outs of retail unit 50%
• Refurbishment costs 40%

Office Lets or Owner Occupied Offices

What capital allowances could you achieve?

• Purchased units 35% – 40%
• Fit outs of retail unit 90%
• Refurbishment costs 60%

High Street Retail Units

What capital allowances could you achieve?

• Purchased units 25%
• Fit outs of retail unit 85%
• Refurbishment costs 60%

Pubs and Restaurants

What capital allowances could you achieve?

• Purchased units 20% – 40%
• Fit outs of retail unit 90%
• Refurbishment costs 60%

By using specialist chartered surveyors and qualified tax advisors who are experts in the field of capital allowances, you could:

• Maximise your tax relief
• Reclaim overpaid tax
• Reclaim a tax rebate from HMRC
• Reduce your current and future tax bills

For an initial free assessment and fees charged on a win only basis contact:
Philip Cudworth FCA - McGregors Chartered Accountants
01623 635349
Philip.cudworth@mcgregorscorporate.co.uk