Capital Allowance Change April 2014

Published: 03 December 2013

The ability of commercial property buyers to claim Capital Allowances has changed forever and for the poorly advised it could totally disappear.

In general terms Capital Allowances will not be claimable by a buyer acquiring property after 31st  March 2014 where the allowances have not been pooled by a Seller and included in a Fixed Vale Requirement (s198 Election) or a Disposal Value Statement.  There are exceptions to this and we can provide further details when requested.

 Not only will clients lose valuable tax relief or maybe even suffer a reduction in property value where the Seller has not pooled expenditure but their professional advisers will be more at risk than ever should they fail to warn their clients of the impact of the change.

 What Action Should You Take?

  •  as a minimum,  circulate all clients now a summary of the change with its consequences irrespective of whether they have an impending sale or purchase.
  • provide all clients with regular reminders of the changes and urge them to contact you as soon as they consider a sale or purchase.
  • Ideally review all clients historic property expenditure (investors and owner occupiers) to ensure that allowances are pooled wherever possible.

 Remember there is no restriction on retrospective claims (apart from entitlement issues) up until the sale of the property and there is no reason why clients should not benefit from the relief now irrespective of the forthcoming change.

If you require clarification of the change please contact us on 01423 567818.

 Accountants Capital Allowances April 2014