Capital allowances on commerical property

One type of expenditure that qualifies for capital allowances relief is plant and machinery. This is expenditure incurred on items that are used in your business.

There are a wide range of assets that businesses can claim deductions on as part of plant and machinery capital allowances. These include cars, fixtures, and parts of a building considered integral. You can also claim for the cost of altering a building to accommodate plant and machinery, as well as demolishing it.

When you’re assessing what might qualify as a capital allowance fixture, consider what is attached to the building itself. Examples might include:

• fitted kitchens and bathrooms; and
• fire alarm and CCTV systems.

As with other forms of capital allowances, there are inevitably exclusions. It’s not possible to claim plant and machinery allowances on items that have been leased; items used exclusively for business entertainment; structures such as roads; or buildings, including doors, shutters and gates.

Keep in mind that you may be eligible to claim for structures and buildings allowances. If you require guidance on what falls into each category, contact a reputable adviser such as ForrestBrown, who can advise you on eligibility.

Structures and buildings allowances (SBAs) are a type of expenditure that qualifies for capital allowances relief. It can be claimed if the taxpayer has a relevant interest in the building or structure. A relevant interest is the interest in the building or structure held by the person who incurred the expenditure. That person will likely have bought, built or leased the property.

Those that are eligible to claim fall into three broad categories and reflect a range of different interests in/relationships with the property.

There are a number of expenses associated with buildings that can’t be claimed as SBA, for example, planning permission, legal expenses and land costs.

You also need to be mindful of any other allowances that you’ve claimed and ensure that the item you’re claiming for hasn’t already been used to claim another allowance. Be aware that you can’t claim on anything for which you’ve received a grant or contribution.

If in any doubt as to what qualifies and what doesn’t, seek the advice of an expert adviser. At ForrestBrown, we can review your purchase or project and give you clear advice on the parameters of your claim, including applicable rates and allowance periods.

There are inevitable nuances to keep in mind when claiming capital allowances, particularly if you have multiple properties within a portfolio. That’s why it’s important to seek advice from a reputable adviser such as ForrestBrown who can support you in the process.

Once we’ve assessed your initial claim, we can help you to set up an in-house process that facilitates year-on-year claims, integrating your quantity surveyor and mapping by tax codes, enabling you to take control of your capital allowance claims. We can also assist with projected modelling, cashflows and projected allowances over the course of the project.

ForrestBrown has established a claims process, designed to support your needs. Our experts will work collaboratively with you throughout a five-step process:

Our expertise makes the difference when it comes to optimising claims, enhancing the work of accountants and in-house teams.

We take a holistic view of your project, ensuring that the unique requirements of your business are evaluated. We remain flexible throughout and find the approach that’s right for you, rather than locking you into a model that will quickly date.