Do you own, or are you thinking of buying commercial property?

If so, have you given any thought to Capital Allowances?

Capital Allowances can be used to reduce the amount of tax you pay on your business profits. However, in order to claim Capital Allowances, you will have had to have allocated your expenditure on the fixed plant and machinery in the building to a Capital Allowance pool and served the appropriate notice on H M Revenue and Customs.

If you are buying a commercial property and wish, in the future, to claim Capital Allowances in respect of any fixed plant and machinery, which were in the property at the time of your purchase, then the seller will need to have satisfied the requirements outlined above, or else the buyer will lose the right to claim Capital Allowances on these fixtures in the future.

If the buyer is unable to claim Capital Allowances because of something the seller has not done, this may impact upon the price which the buyer is willing to pay for the property.

Capital Allowances are a specialist area of tax law and any seller or buyer of commercial property should, therefore, ensure that they receive suitable advice from an accountant or Capital Allowance specialist and a solicitor, well in advance of a contract being entered into for the sale of the property. In fact, the seller should obtain the appropriate advice before they even instruct an agent to market the property on their behalf so that reference to the Capital Allowance position can be made in the sales brochure.

Photo by Loco Steve