Understanding how to benefit from Capital Allowances

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Are you aware that many property owners are overlooking substantial tax savings by neglecting to claim capital allowances on embedded items within their commercial properties? This oversight often stems from a lack of awareness about changes to the Capital Allowances Act in 2014.

Capital allowances offer businesses tax relief on specific types of expenditure, including machinery and equipment used in business activities. Embedded items, such as heating systems and lighting fixtures, are part of a building but can be considered separate assets eligible for capital allowances.

Previously, capital allowances could be claimed on embedded items with the assistance of a specialist firm. However, since 2014, new regulations mandate that these items must be identified and claimed within two years of purchasing a commercial property.

It’s crucial for property owners and their accountants to understand the importance of identifying and claiming capital allowances on embedded items. Engaging a specialist can help ensure eligible items are identified and claimed within the required timeframe.

Claiming capital allowances on embedded items offers several benefits:

1. Tax savings: By claiming allowances, property owners can reduce their tax liability, resulting in significant savings.
2. Improved cash flow: Owners can receive tax relief upfront, enhancing cash flow instead of waiting for deductions over time.
3. Enhanced property value: Identifying and claiming allowances can make a property more attractive to buyers seeking tax-efficient investments.

While there are limitations to the system, seeking guidance from a specialist ensures eligibility and correct procedures are followed.

Any property with a business operating from it can qualify for capital allowances. If you own properties like offices, hotels, manufacturing facilities, or retail units, consulting a Capital Allowances specialist is essential to maximize tax savings.

In conclusion, property owners should act promptly to claim capital allowances on embedded items to avoid missing out on tax savings. Engaging a specialist firm can help identify eligible items and ensure timely claims, resulting in improved cash flow, tax savings, and enhanced property value.

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