Act now to avoid missing chance to claim tax relief
Aubrey Calderwood from Capitus takes a look at a taxing side of commercial property
Changes are afoot which will affect the tax reliefs commercial property owners can claim against property assets which could cost them thousands of pounds each year.
The Revenue has proposed a series of changes to the Capital Allowances scheme, which allows owners of commercial property to claim valuable tax reliefs against the costs incurred on installing fixtures within a building (heating, lighting, ventilation, lifts and such like).
For example, if you bought a building 10 years ago for £1m, the fixtures inherent within the building could be worth up to £300,000.
For a company paying 26% tax, capital allowances could give tax savings up to £78k. For an individual paying income tax at the 50% higher rate, the tax savings are even more striking at £150k.
Often commercial property owners aren't aware these reliefs are available and therefore they will have paid tax they shouldn't have.
Under the current rules if this happens businesses can file an historical claim which can dramatically reduce or even eliminate their tax bill in the current year.
However, when the changes come in next year it's likely that the Revenue will restrict the ability to make historical claims.
This could result in millions of pounds of tax relief that commercial property owners are entitled to claim being lost for good.
Act now and review your property assets before the changes come in to make sure you don't miss out on tax relief you are entitled to.
Visit www.capitus.co.uk for more details.