Banking Tax Finance
Banking Tax & Finance Issue 7 | Summer 2010
In this Issue
Carbon Trust Loans - More for Less
What now for Capital Allowances?
Know your REIT's - Profit Distributions
Grants Newsletter - May 2010
Pre-Contract Negotiations for Capital Allowances
Hotel Developments - Are Your Margins Sustainable?
Energy Efficiency, ECAs and Tax Reliefs - 10 Point Plan
Another Budget, Another Rise in Landfill Tax
Islamic Finance and Capital Allowances
 
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Welcome

The summer edition of Bottom-Line Thinking squeezes in just before the 50 day emergency budget on 22nd June. In this edition..........

... we cover changes to Carbon Trust loans and simple measures to avoid losing out on Enhanced Capital Allowances. We also focus on the hotel sector with more advice to hotel owners and investors. Under the heading of Islamic Finance we uncover the types of arrangements included which allow borrowing from a financial institution without the payment of interest on the loan.

Our second of a three part series by David Vogel looks at profit distributions for REITS.

Large capital funding grants remain scarce; the Grants newsletter looks at the subject in depth.

There is an article reporting on the Budget 2010 in respect of landfill tax and recommends ways to practice more commercially focussed remediation.

The issue of Capital Allowances in pre-contract purchase negotiations is one that can prove expensive to seller and buyer in the wrong circumstances, or due to insufficient forethought or planning.

It may now seem like a long time ago, but we look back at the last Labour Government budget and speculate in ‘What now for Capital Allowances’ over likely measures to be introduced on 22 June, it will all become evident within the next two weeks.

Following the Budget, we will issue our Budget Special, Bottom-Line Thinking where we will take a considered view, if you have received this via email, you will also receive our budget mailing.

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.
 
Carbon Trust Loans - More for Less
From 12 April 2010, the Carbon Trust has reduced the maximum loan they offer to businesses investing in energy saving projects to £100,000. The previous cap was raised to £500,000 in February of this year, but the success of the scheme coupled with a finite pot of money has brought about this reduction.

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What now for Capital Allowances?
Now that David Cameron and Nick Clegg have found enough common ground to form a Government, one thing we can be certain about is that public money needs to be found from somewhere to reduce the UK’s massive debts. The Conservatives would prefer the emphasis to be on a reduction in Government spending, whilst the Liberal Democrats believe that a fairer system of taxation is the answer.

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Know your REIT's - Profit Distributions
David Vogel FCA has recently joined the Banking Tax and Finance team, advising major UK and overseas clients. David is a senior Chartered Accountant and a well known and respected figure in the property world. In this second part of a three part series covering the treatment of REITs, David explains how different classes of shareholders are taxed on the receipt of property income distributions.

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Grants Newsletter - May 2010
Large capital funding grants remain scarce and as we pass from the end of the 2009/10 tax year into the next, some of the better known programmes have drawn to a close, with other opportunities and funding programmes taking their place.

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Pre-Contract Negotiations for Capital Allowances
The value of Capital Allowances to either party to a property transaction will depend on various factors, but the bottom line is that Capital Allowances save tax and therefore, have value. This article touches on some of the practical implications of badly worded contract clauses dealing with Capital Allowances and the relevance of the pre-contract documentation that may exist in some common situations that we have encountered.

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Hotel Developments - Are Your Margins Sustainable?
There are currently a number of pressures on hotel developers and operators, even without the problems caused by Icelandic ash! The recession has put additional pressures on room rates, as corporate customers and holidaymakers seek to save costs. To make matters worse, hotel running costs and new development and refurbishment costs are on the rise.

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Energy Efficiency, ECAs and Tax Reliefs - 10 Point Plan
Historically many property developers, investors and occupiers have ignored the subject of energy efficiency within their commercial properties, but with increasing raw fuel prices and financial penalties for bad behaviours, there is a much greater emphasis placed on the environmental impact of how we all carry out our day to day business. To encourage a change in attitude continual changes are being made to the Capital Allowances regime in favour of energy efficient equipment. This article considers some of the key areas to be considered when embarking on any project.

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Another Budget, Another Rise in Landfill Tax
The recent budget was a relatively quiet one for property and construction. For brownfield development specifically it was very quiet, particularly when compared to last year, which saw the first revisions of Land Remediation Relief (LRR). Predictably, LRR remains unchanged as companies get to grips with the new rules and the effects of those changes start to emerge. This article reports on the Budget 2010’s comments in respect of landfill tax and recommends ways to practice more commercially focussed remediation.

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Islamic Finance and Capital Allowances
Under the heading of ‘Islamic finance’ are many different types of arrangements (also known as Shariah compliant structures), which allow borrowing from a financial institution without the payment of interest on the loan. Such arrangements are becoming increasingly popular with non-Muslims, in order to make funds accessible to Islamic investors. Shariah structures can also be used to facilitate stamp duty land tax saving schemes for property acquisitions.

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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.