At Banking Tax & Finance we have helped many property developers use the available Capital Allowances to enhance the financial viability of a project.
When considered at an early stage, the level of Capital Allowances can often be enhanced. They can also assist in the marketing of a project by helping to support the asking price in its eventual sale.
Buyer services for property owners
Historically, claims for Capital Allowances on property have been relatively low and there are many commercial buildings where no claims have been made at all. A purchase situation often provides an opportunity for a significant tax relief claim to be made. Where this opportunity has been overlooked, providing the property is still owned, the ability to make a claim is not lost, even if the purchase was many years ago.
Seller services for property owners
When a building is sold and Capital Allowances claimed, some simple tax planning will ensure that there is no repayment of any benefit previously enjoyed. How the allowances are dealt with can also provide useful opportunities to create some added value, by carefully considering the tax-paying status of the parties. Again, early expert advice is essential to prevent possible loss.
Construction services for property owners
Where a new project is planned, then the value of any Capital Allowances available can often improve the scheme’s financial viability and also reduce its funding risk, which should be highlighted to a lender. Pre-planning these allowances will ensure any relief available is maximised and for example, the full benefit of Enhanced Capital Allowances is considered, offering 100% tax relief for low carbon / energy saving equipment.
Refurbishment services for property owners
The Capital Allowances legislation contains specific provisions which only apply to the refurbishment of existing properties. As a result, these projects often contain significant levels of tax relief which can be further enhanced by the early consideration of certain assets and pre-planning work. It is not uncommon for as much as 75% of the total project costs to qualify for relief. Early expert advice is therefore essential.