Banking Tax Finance
Banking Tax & Finance Issue 6 | Spring 2010
In this Issue
Fundamental principles to Avoid Missing Out on Enhanced Capital Allowances
Wetherspoon - Part 2
Global Sourcing Strategies
Significant Group Undertakings and the Carbon Reduction Commitment
Carbon Assessor - New for CRC Compliance 2010
VAT Trap for Charities
Reducing the Cost of an Office or Premises Move for Tenants
Know your REITs
Deferred Revenue Expenditure
Property Transactions Between Connected Persons
 
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Welcome

The 2010 spring edition covers a wide range of topics on Capital Allowances and related property issues. The Budget, due on 24th March, will be covered in our next issue.

We take a look at the recent publication of the decision reached in J D Wetherspoon plc -v- HMRC, this will be followed up with a more in- depth analysis in future weeks to be posted on our website. We also consider how REITS might benefit from Capital Allowances in this first of a three part study on the specialist treatment of REITS, by David Vogel FCA.

Energy performance is of concern for all businesses, so this month we look at the process for claiming ECAs, there is a paper on the Carbon Reduction Commitment and details of a new software tool for monitoring and gathering energy data for CRC compliance.

Reducing the tenant's cost of a premises move, explores incentives and options available to occupiers. We also take a look at VAT and charities, an article on deferred revenue expenditure, the treatment of Capital Allowances in transactions between connected persons and finally an article looking at global sourcing strategies, or low cost country sourcing as it is sometimes known.

A summary of each article is contained below, to view the full article please click on the 'more' links. We hope you enjoy reading our newsletter and should any of your colleagues want to subscribe to future issues, they can do so easily by selecting the 'subscribe' link in the left hand column below.

Many more articles and technical resources can be found on the Davis Langdon Banking Tax & Finance teams website at www.bankingtaxfinance.com. Look for the ‘view all resources’ button on our homepage.
 
Fundamental principles to Avoid Missing Out on Enhanced Capital Allowances
Since the introduction of the special rate pool in April 2008, taxpayers’ cash flows have been hit hard by the reduced level of writing down allowances from Capital Allowances. This has raised the importance of claiming the more valuable relief’s such as ECAs. To successfully claim these, however, it has been and will be necessary to put in place a process, which at very least, undertakes some fundamental checks to avoid ‘loss’.

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Wetherspoon - Part 2
A decision was reached by the Tribunal in respect of the second hearing in the case of J D Wetherspoon plc -v- HMRC and was published on 15 January 2010. In this article we take a look at the outcome and make observations on the important areas. A more detailed analysis of individual items will follow shortly.

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Global Sourcing Strategies
As market conditions continue to be challenging, global sourcing, or low cost country sourcing as it’s sometimes known as, is becoming an increasingly considered option. The aim of this article is to give an insight into how Davis Langdon invests in research which is commercialised and brings value innovation to our clients.

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Significant Group Undertakings and the Carbon Reduction Commitment
The question of whether to disaggregate or not? The march of legislation brings an obscure word to prominence - ‘disaggregation’ was certainly not in common usage. A key point that has emerged, however, from the Government Consultation on the Carbon Reduction Commitment Energy Efficiency Scheme (CRC), is that participants with large subsidiaries can exercise an option to ‘disaggregate’ and make separate registrations for the scheme.

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Carbon Assessor - New for CRC Compliance 2010
This new software platform empowers portfolio property owners with a simple way of gathering and managing their energy data. With all your energy data assembled, Carbon Assessor is the right place to start defining an ongoing emissions reductions strategy. For example, in the short term desktop display energy certificates will highlight poorly performing buildings, where the easiest savings are likely to be found.

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VAT Trap for Charities
A change in interpretation announced by HM Revenue & Customs (HMRC) in July 2009 will further restrict the ability of charities to obtain the benefit of zero rating where there is some business use of a new building.

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Reducing the Cost of an Office or Premises Move for Tenants
During the current recession, large numbers of corporate occupiers have decided to remain in their existing premises despite an expired lease, a current break option on their lease, or a pressing need to upgrade or relocate. There are several options available to a tenant that may offset and reduce the cost of moving premises.

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Know your REITs
David Vogel FCA has recently joined the Banking Tax and Finance team. He is a well known and respected figure in the property world and he is also a specialist on the treatment of Real Estate Investment Trusts (REITs). In this first part of a three part series covering the treatment of REITs, David explains the importance and value of Capital Allowances.

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Deferred Revenue Expenditure
In the context of property expenditure, ‘deferred revenue expenditure’ is the cost of repairs and maintenance that could properly be treated as revenue expenditure, but which has been capitalised in the accounts of the business. It is not uncommon for revenue expenditure forming part of a property refurbishment project to be capitalised, because the accounts of a business are often finalised before the tax computations. This article considers the tax consequences of capitalising revenue expenditure.

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Property Transactions Between Connected Persons
Whilst very few property transactions between connected persons are carried out to avoid tax, the tax rules often treat such transactions differently to those between unconnected persons. In this article we look at the consequences for Capital Allowances when a property transaction is carried out between connected persons.

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Whilst every effort has been made to ensure accuracy, information contained within our newsletter may not be comprehensive and recipients should not act upon it without seeking professional advice.