Capital allowances FAQs
Click on the questions below to reveal the answers
My accountant already deals with our capital allowances. Isn’t this something they should have done already?
Only large accountancy firms with in-house construction experts (and big fees!) can offer complete and up-to-date advice on capital allowances. We will almost certainly be able to identify opportunities to increase and accelerate tax savings, and we won’t charge you anything if we can’t.
It’s important to note that we won’t undermine your accountant – we’ll work in collaboration with them to increase your savings.
Might this cause problems with HMRC?
No. Claiming can result in a cash rebate from HMRC, or a reduction in current and future tax bills, or both.
Capital allowances aren’t a tax-avoidance scheme – this is only about good tax housekeeping, making the most of government-backed tax relief.
Will this affect my capital gains tax or reduce the value of my property?
No. Capital allowances are a right, not a privilege. They are not taken into account when property is valued for commercial or accounting purposes.
The tax legislation and published HMRC guidance make it very clear that capital allowances will not increase a capital gain.
This sounds too good to be true. There must be hidden costs?
There are absolutely no hidden costs and no catch. See our testimonials page for reviews from our very satisfied clients. Our initial eligibility review is free, and costs after that depend purely on the successful result.
Can I make an historic claim?
Yes. If you still own the asset, you can start claiming in the first year of your accounts that are open.
Can I claim on my property held in a pension fund?
No. Because the pension fund does not pay tax, you can’t claim tax relief.
Do I need to consider capital gains tax (CGT) alongside my capital allowances claim?
Claiming capital allowances on your fixed plant and machinery will not reduce your CGT base cost if you sell your property for a profit. It is more complicated if you sell at a loss, and you are advised to discuss your CGT position with an accountant.
Is there a time limit for claiming the allowances?
Yes. Various time limits exist, depending on when you incurred the expenditure, but this does not always mean allowances are lost. We’ll secure the maximum relief available to you.
Will I need to provide all invoices?
No. Where invoices aren’t available, our process will generate the details needed to show proof of expenditure.
How do I make a claim?
We will analyse the actual cost information and prepare a report, detailing what costs you are claiming allowances on. You then claim the allowances via your tax return.
I am selling an investment property. Will I suffer a tax claw-back on sale?
No. You will be able to keep all the allowances, even after you have disposed of the property.
I have carried out a fit-out in my leased property. Can I claim the capital allowances?
Yes. Tenants can claim against their leasehold additions.
Can landlords claim on a tenant’s fit-out costs?
Yes, if they have made a capital contribution to the tenant’s fit-out works, for example carpets and floor boxes.
Can I claim allowances on my residential block?
Only on communal areas. You can’t claim allowances on a residential dwelling, which means anything beyond the front door.
I am a developer. Can I claim allowances on the properties I build?
No, because you hold the properties as trading stock.
However, traders may be able to claim capital allowances for properties that are genuinely held as an investment (it doesn’t normally matter if this intention changes and the property is later sold). Companies may also be able to claim land-remediation relief for money spent cleaning up contaminated development land or buildings.
Get in touch to discuss your situation.
Can I claim allowances on VAT paid?
Yes. You can claim on all non-recoverable VAT that you are charged.
If I buy a property, am I entitled to the capital allowances?
Yes, on certain transactions, but only when you obtain the right advice on capital allowances and have the correct clauses in the purchase contract.
