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Veritas Blog for Harold Sharp Proptech

As part of our working relationship with Harold Sharp accountants we were recently requested to add an article on the new Structures and Buildings allowances for their Proptech initiative.

09 Dec 2019

Written by: Nolan Masters

Guidance on Structures & Buildings Allowance

It has taken HMRC a year since the Structure and Buildings Allowance (SBA) was announced in the November 2018 budget to publish the detailed guidance on its new tax give away for capital expenditure on all non-residential buildings.

09 Dec 2019

Written by: Clive Curd

New Case Law – HMOs and HMRC Enquiry Times

Another recent Case law ruling, Hora Tevfik v HMRC (2019) recently dismissed Capital Allowances claims on HMOs (Houses of Multiple Occupancy) plus also highlighted the ability of HMRC to make enquiries into claims beyond the normal time limits.

11 Nov 2019

Written by: Clive Curd

Archive

Latest News

Veritas Blog for Harold Sharp Proptech

09 Dec 2019

As part of our working relationship with Harold Sharp accountants we were recently requested to add an article on the new Structures and Buildings allowances for their Proptech initiative.

Guidance on Structures & Buildings Allowance

09 Dec 2019

It has taken HMRC a year since the Structure and Buildings Allowance (SBA) was announced in the November 2018 budget to publish the detailed guidance on its new tax give away for capital expenditure on all non-residential buildings.

New Case Law – HMOs and HMRC Enquiry Times

11 Nov 2019

Another recent Case law ruling, Hora Tevfik v HMRC (2019) recently dismissed Capital Allowances claims on HMOs (Houses of Multiple Occupancy) plus also highlighted the ability of HMRC to make enquiries into claims beyond the normal time limits.

Veritas Publish SBA Article in Taxation magazine

10 Jul 2019

In the latest edition of Taxation Magazine Veritas Director Clive Curd takes a practical look at how the new Structures and Buildings Allowances legislation works.

Success at the National Surveyor’s 7’s Rugby Tournament

17 May 2019

Congratulations to Jack Hooper of Veritas and his teammates from the Thirdway Barbarians team who won the recent National Surveyors 7's rugby tournament at Richmond

Veritas Become Member Firm of PAI Commercial Property Network

07 May 2019

Veritas are pleased to announce they have become a Member Firm of PAI Commercial Property Network, the UK's largest connected network of commercial surveying practices.

SBA Draft legislation Out

15 Apr 2019

HM Revenue & Customs have issued the draft legislation for the new Structures and Buildings Allowances legislation and have requested comments by April 24th before final drafting ready for issue later this year. Veritas Advisory will be responding.

New Case Law – £226m in Dispute!

05 Apr 2019

The First Tier Tribunal considered the capital allowance claim of a hydroelectric power generation scheme at Glendoe, in Scotland; the total construction cost was approximately £300m with HMRC accepting £34 million, leaving £226 million in dispute.

Veritas Advisory Appointed Capital Allowances Supplier to Carehome.co.uk

08 Mar 2019

Veritas are now a listed supplier to Carehome.co.uk as Capital Allowances advisor to maximise the tax reliefs on acquisitions, refurbishment and extensions of care homes.

In an environment of squeezed returns, the amount of tax being paid by businesses and investors is given increased scrutiny.  One of the only ways to receive tax relief on property expenditure is via Capital Allowances and often over looked still, is the ability to attract the relief on second hand purchases.  Here we provide a simple reminder of what to do when buying a property.

The ability to claim Capital Allowances on second hand acquisitions is often either ignored by the client and their advisors or perceived too much hassle to warrant further investigation.  Typically, any property transaction will have a level of unclaimed Capital Allowances which are up for grabs.  The amount is down to the type, age and specification of the property in question and so there is no one answer fits all, rather each transaction has to be viewed in isolation.  That said, a specialist Capital Allowances advisor will from minimal detail be able to provide a client, once they have gone under offer, an indication of the level of benefit at stake.

The Seller often will not make the Buyer aware of any unclaimed allowances and so the onus is often on the Buyer to drive the conversation.  Here are our top 5 points to ensure you address Capital Allowances and where applicable, provide future tax relief to increase investment returns or drive profits up.

  1. Check the Heads of Terms

The heads of terms may highlight to a Buyer the availability of unclaimed Capital Allowances.  Marketing of these allowances as a negotiation tool will often arise where the Seller has incurred expenditure recently, holds as trading stock, cannot use the allowances post sale or cannot claim.  However, often the Buyer will be entitled to allowances the Seller is not so  there will still be a need to understand the validity of the value of Capital Allowances and whether any contractual provisions are required.

  1. Don’t be put off by N/A or nothing to claim in the replies to enquiries

This is a common position adopted by Seller’s lawyers, often because they are not sure of the position.  Since the rule change where the unclaimed Capital Allowances must be quantified and elected over, the onus is now on the Purchaser to push back and make their own enquiries as to the availability of Capital Allowances.  For example, if the Seller was the first buyer after April 2008 then they would have entitlement to claim Integral Features but would require that value to be calculated and elected across for the Buyer to take the onward benefit.

  1. Get an understanding of what benefit is at stake

Often Capital Allowances, if addressed, are raised at the last hour and so there can be a tendency to drop them so as to not risk the deal stalling.  We have often seen extended exchanges when the level of benefit is immaterial and so getting a third party view as to what the position is can be invaluable and if immaterial, it ticks the box and removes the risk of any unnecessary delays.

  1. Contract is king

With the change in legislation, under s187A of the Capital Allowances Act it now requires that for the Buyer to claim any historic unclaimed allowances, there must be an election to pass that benefit across within 2 years of completion.  Furthermore, the Seller must satisfy the pooling requirement, which simply means recognising the agreed value in their next tax return.  Contrary to some beliefs, there should be no tax impact on the Seller.

  1. Buy yourself some time

Most deals are time pressured and Capital Allowances can be seen as an annoyance for the Seller to deal with, so it can often be a better approach to put a provision in the sale contract.  This should agree to pass over the unclaimed Capital Allowances, to be calculated by the Buyers Capital Allowance advisors and elected within a prescribed time limit; there is no legal requirement to agree the figures prior to completion as long as the contract wording is sufficient to facilitate a claim post transfer.  This removes those pressure points but gives the Buyer the ability to revisit post completion, with the knowledge of the Sellers future cooperation.