Capital Allowance Scheme

Are you entitled to a Tax Rebate?

If you have purchased or are about to purchase any of the following properties there are possible substantial claims you may be entitled to.

To qualify for capital allowances you (or your company) must satisfy the following criteria:-

  • You are a UK tax payer (Income Tax or Corporation Tax)
  • You own a UK commercial property (minimum purchase price of £200,000)
  • Alternatively you can own a furnished holiday let (FHL) in the UK or EU
  • The property is not held with a pension fund, charity, government owned or traded as stock.


Applicable Properties

HMOs – including student lets, multi let BTL properties/house share and bedsits

Commercial Premises – offices, retails units, factories, pubs, hotels, care homes

 

Furnished Holiday Lets – these must have been available for letting for the last 140 days and let for more than 70 days (this criteria will rise from April 2012 to the property needing to be let for 105 days and to have been available for letting for the last 210 days).

  • If property has been let for more than 150 days on a long term lets (31 days or over) it will not qualify.

These holidays lets can be situated in the UK or within the European Economic Area.

Typical guideline allowances

Commercial Property              20%

Hotels/B&B’s                           30%

HMO’s *                                  7.5%/22%

Furnished Holiday Lets            20%

* this depends upon the date of purchase.

  • Capital Allowances can be set against income tax already paid or future tax for individuals or businesses.
  • Capital Allowances do not affect CGT liability when you come to sell the property.
  • There is no time limit on when these allowances can be claimed, as long as the property is still owned by you.

Do not assume your accountant has dealt with this already. We will work with your accountant to identify any capital allowances for which you qualify. According to HMRC approximately 96% of all allowances available have not been claimed.

Example:

We are currently arranging a 1.2m purchase of a UK holiday home for two 50% tax payers who will benefit from £100,000 Annual Investment Allowance, giving them each a £50,000 tax rebate.  They will also benefit from writing down allowances which will reduce future years tax bill.

If you are interested in finding out more and feel this scheme could benefit you please Contact Us.

The Financial Services Authority does not regulate taxation advice.

These are examples and for information only.  This is not to be taken as financial advice and we recommend that you seek advice pertinent to your own individual situation before embarking on any course of action.

Levels, bases of and reliefs from taxation are subject to change and their value depends on the individual circumstances of the client.

For more information, please contact us