Tax Advice for Property Owners
All businesses, be they trading or investing, need to maximise their revenues and minimise costs. For a successful business tax is often the single largest outgoing. Unfortunately the payment of tax is one of life’s two great certainties. You are however under no obligation to volunteer extra.
As real estate tax specialists our role is to assist you in maximising claims for the reliefs and allowances to which you are entitled. This is to make sure the correct amount of tax is paid and not a penny more. There is no need to tip HMRC!
Won’t my accountant already be doing this on my behalf?
It is unlikely they will have the relevant experience or sector knowledge to be able to provide the level of advice we can in this niche area. The fact that your accountant does not cover the areas we do in the same depth is no negative reflection on them. Here in the UK we have a vast and complex set of legislation underpinning the tax systems. No one person or firm could be an authority on all of it. We work in conjunction with many general accountants in very much the same way a medical GP might refer a patient to a heart specialist!
We provide expert advice across the board for real estate related tax matters. However a large proportion of our work falls into the following categories.
(Mouse over the points below for more information)
Historic Capital Allowance Claims on Fixtures
In most instances property owners are entitled to claim a proportion of the purchase price as having been for the imbedded plant and machinery that was in place at the time i.e. the fixtures. You have already paid for these fixtures, the tax relief (in the form of capital allowances) is simply compensating you for the fact that over time these will degrade and eventually need updating or replacing.
A claim on these fixtures could represent a substantial tax reduction or even rebate. We are regularly making claims between 20% and 40% of properties’ purchase prices, sometimes even more, for our clients. That could equate to as much as £400k of allowances for a property bought for £1m.
The true picture will only be revealed once we have conducted a full review and survey. The actual claim is determined by the property and its usage. The key test is if the item is used for the business (therefore claimable) or forms part of the setting where the business is carried out (un-claimable). This distinction is not as clear cut as you might think. It can vary greatly between different industries and properties and has been the subject of many decades of case law (e.g. a hotel can claim for a chandelier where as a factory cannot).
There is no time limit on how far back we can look i.e. the purchase could have been many years ago. However you are claiming against the expenditure (cost), not the current value. Inflation can erode an historic claim if the purchase was several decades ago i.e. a building bought in the 80s probably cost a lot less than it would today.
We have a wealth of experience in calculating, supporting and processing historic claims for capital allowances in a manner that complies with all HRMC guidelines and the substantial amount of case law in this area. We have never had a claim rejected by HMRC and are more than happy to guarantee all of our fees on success.
Remember, capital allowances are specifically allowed by legislation and all qualifying businesses are entitled to them.
We only charge as a percentage of the allowances we find and successfully claim. With no fixed fees or upfront costs we are tabling a zero risk proposal.
If you own a building and want to find out what you could claim then please don’t hesitate to contact us today for a free no obligation appraisal of your assets.
Capital Allowance Advice when Buying or Selling
Over the last two years there has been a raft of changes that affect capital allowances when buying or selling a property. Capital allowances are not something that can be ignored anymore. If the new regime is not addressed correctly the buyer will lose the right to ever claim on the fixtures and the seller could crystallise a surprise tax charge.
Being correctly advised from both a compliance and strategic perspective can help you negotiate the best possible outcome.
We have prepared a brief on these changes which can be downloaded by clicking on the link at the below.CA Changes for Property Owners (PDF)
If you are buying, have recently bought/sold a building or are even thinking about buying/selling, we strongly urge you get in contact with us a soon as possible. We can make sure you are compliant with the new legislation and not about to walk off a tax cliff! Contact Us!
Review of Renovation/Build Expenditure
Picking up all the eligible expenditure in a development or renovation is not always as straight forward as it sounds. We can review and cross-examine all the information including the invoices, design specification, bill of quantities and contractors quotations to make sure that all available allowances have been claimed. This will normally result in a marked increase in the amount of allowances available. We also provide a consultancy service for the design phase of a project to help ensure all opportunities to build in allowances are exploited.
When a property is either bought or sold you are triggering a taxable event which will have tax implications e.g. SDLT on purchase, CGT on disposal etc. The manner and timing of the transaction can have a huge impact on the tax due. Sometimes it can be as simple a matter as applying for the correct reliefs for your particular transaction within the statutory time limits.
It is best if we are instructed before a transaction has completed. We are however increasingly being brought in to provide historic reviews for transactions that may have happened some years ago. It is then a case of retrospectively identifying what should have been the tax outcome and then negotiating to get returns amended and tax rebated. Unfortunately it is not always possible to get HMRC to amend returns outside of statutory time limits. However as we only work on a percentage of tax reclaimed you are always in a win-win scenario.
Whilst the above covers a lot of the work we do it is by no mean exhaustive. If you own a commercial or residential building there will almost certainly be areas where we can add value. We pride ourselves on operating in a transparent and open manner when it comes to fees. All charges and engagements will be agreed and set out in writing prior to chargeable work commencing. So give us a call today for a free initial appraisal.