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Capital Allowances Incentives to Increase?

In a positive move to encourage capital investment Rishi Sunak announced in the 2022 Spring Statement plans to expand the Capital Allowances legislation, subject to a consultation process, to be formally announced in the autumn budget and to take effect from April 2023

23 Mar 2022

Written by: David Gibson

Veritas Contribute to UKAA Publication – Improving Returns on Build to Rent

As a member of The UKAA, we were pleased to be invited to contribute to their latest buzz news issue, in which we explain how investors-operators of build to rent can improve investment returns by claiming capital allowances

02 Nov 2021

Written by: Nolan Masters

Veritas Confirmed New Member of UKAA – The Organisation for the UK Build to Rent

Veritas Advisory have now been confirmed as a new member of UKAA, the organisation for the UK Build to Rent sector. 

18 Oct 2021

Written by: David Gibson

Archive

 

Latest News

Capital Allowances Incentives to Increase?

23 Mar 2022

In a positive move to encourage capital investment Rishi Sunak announced in the 2022 Spring Statement plans to expand the Capital Allowances legislation, subject to a consultation process, to be formally announced in the autumn budget and to take effect from April 2023

Veritas Contribute to UKAA Publication – Improving Returns on Build to Rent

02 Nov 2021

As a member of The UKAA, we were pleased to be invited to contribute to their latest buzz news issue, in which we explain how investors-operators of build to rent can improve investment returns by claiming capital allowances

Veritas Confirmed New Member of UKAA – The Organisation for the UK Build to Rent

18 Oct 2021

Veritas Advisory have now been confirmed as a new member of UKAA, the organisation for the UK Build to Rent sector. 

Veritas Supporting Charitable Causes

01 Oct 2021

We have chosen to support four charitable causes reflecting activities that are close to us and to people we know and would like to raise awareness of.

Using Artificial Intelligence for Capital Allowances

27 Sep 2021

Can Artificial Intelligence help claim capital allowances? In addition to preparing detailed claim reports for clients, Veritas Advisory, in partnership with Brunel University and Innovate UK, are applying technology to solve some of the issues, the main one being how to use data efficiently and correctly.

New Case Law – Potato Store is Plant

07 Aug 2021

JRO Griffiths Limited v The Commissioners for Her Majesty’s Revenue and Customs [2021] UKFTT 257 (TC) resulted in the taxpayer winning their appeal in whether or not a warehouse used to store potatoes for a crisp manufacturer is plant.  The taxpayer won on 2 counts.

Estates Gazette Article – Capitalise on Allowances

20 Jul 2021

Veritas Advisory Director Nolan Masters, together with Alex Barnes a Partner at BDB Pitmans LLP, have published an article in Estates Gazette on how capital allowances claims can mitigate the increasing cost of tax on property investment.

New Case Law – Satellites

16 Jul 2021

A Capital Allowances case Inmarsat Global Limited and The Commissioners for Her Majesty’s Revenue and Customs UT/2019/0167 V), has been refused by the Upper Tier Tribunal, in relation to the launch of satellites.

Taxation Magazine Article – The New Super Deduction

04 Jul 2021

In the June edition of Taxation Magazine Veritas Advisory Director Nolan Masters set out how the new super deduction and special rate allowances will affect property owners, occupiers and investors. Click here to read the article in full

New measures designed to restrict tax avoidance by large multinationals could also hit the profits of property investors.  Under proposed plans, the ability to offset your tax bill with all finance interest payments is to be capped to between 10% and 30% of profits.

This would result in higher tax bills for some and would particularly impact on real estate companies who often carry a high level of debt.

REIT companies could also be affected given that whilst they do not pay tax they are required to distribute 90% of their tax-exempt profits.  This would mean that if a portion of their interest payments were not tax deductible dividends would increase against a possible drop in the actual returns being made.

”In recent years, Capital Allowances has been seen as one of the few legitimate ways in which companies and individuals can look to mitigate tax”

As with the general property market, the way in which property is financed goes in cycles and in the current market of relatively low loan to values it has already created a widening gap between income receipts and the allowable tax deductions.  So any talk of reducing the ability to fully deduct for loan interest payments should be a concern for some.

This coupled with the current trend of rising rents means that this gap is only likely to widen further, with tax becoming an increasing cost to investment returns.

In recent years, Capital Allowances has been seen as one of the few legitimate ways in which companies and individuals can look to mitigate tax on property.  This is set to continue and Capital Allowances will be of greater importance should this measure get the green light.

Capital Allowances also offers investors the added flexibility of being able to claim from day one, whilst being able to roll any unclaimed allowances forwards to a future period, when there is often a greater need to mitigate tax.  This will allow investors to adapt to changing market conditions and future proof against those unforeseen changes, such as the one being proposed.

This change is part of wider consultation on the tax deductibility of interest expense, with the deadline for responses by 14 January 2016, with any new rules planned to come into force on 1 April 2017.