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Capital v Revenue – Understand The Risks v Benefit

As we are fast approaching the self assessment filing deadline for individuals and the amendment window for corporate entities with a year end of March, understanding the importance of what constitutes capital or revenue expenditure, and the risks and benefits associated with it, is extremely important.

24 Jan 2024

Written by:

First Year Allowances for Corporate Members of Partnerships

In a positive move HMRC have updated their capital allowances guidance for partnerships stating that partnerships with underlying corporate partners can claim first year allowances

19 Jan 2024

Written by: Abu Choudhury

Substantial Unclaimed Capital Allowances On Existing Assets

Capital Allowances provide an opportunity to save substantial amounts of money in a lean market yet many property owners and occupiers are already sitting on vast savings without even knowing it.

23 Oct 2023

Written by: David Gibson

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Latest News

Capital v Revenue – Understand The Risks v Benefit

24 Jan 2024

As we are fast approaching the self assessment filing deadline for individuals and the amendment window for corporate entities with a year end of March, understanding the importance of what constitutes capital or revenue expenditure, and the risks and benefits associated with it, is extremely important.

First Year Allowances for Corporate Members of Partnerships

19 Jan 2024

In a positive move HMRC have updated their capital allowances guidance for partnerships stating that partnerships with underlying corporate partners can claim first year allowances

Substantial Unclaimed Capital Allowances On Existing Assets

23 Oct 2023

Capital Allowances provide an opportunity to save substantial amounts of money in a lean market yet many property owners and occupiers are already sitting on vast savings without even knowing it.

The Risk to Lawyers of Not Correctly Addressing Capital Allowances

23 Oct 2023

Solicitors acting for clients on a purchase or disposal of a commercial property must ensure they correctly address capital allowances; failure to do so may give rise to reputational and / or financial risk.

Maximising Capital Allowances and Avoiding Pitfalls Through Timing

23 Oct 2023

The rules surrounding the transition between Super Deduction and Full Expensing can be complex and the importance of fully analysing and understanding any contract for construction or purchase is significant.

Use Capital Allowances to Help Pay for Higher Spec Offices

23 Oct 2023

On a typical £1m CAT B fit out the landlord or occupier, whoever is incurring the expenditure, could recover up to £250k by claiming Capital Allowances.

HMRC Capital Allowances Enquiries Focusing On Certain Sectors

26 Sep 2023

An increasing number of claims being submitted to HMRC are not fully compliant with the legislation, and in some cases are double what they should be, particularly in certain industry sectors.

Unearthing Hidden Treasures – LGT Wealth Article

01 Sep 2023

Veritas Director David Gibson was recently interviewed by Nicholas Duffy of LGT Wealth Management for thoughts on how family offices and property owners can identify Capital Allowances to help leverage other investments. Click here to read in full

Offset ESG Costs With Capital Allowances

09 Aug 2023

The impact of both ESG and MEES on the property sector is resulting in significant capital investments. To incentivise and reduce the net cost of capital investment, tax relief is available by way of capital allowances.

With the announcement to provide further tax breaks on Authorised Contractual Schemes (ACS), there is now another tax transparent vehicle on the block for UK real estate funds to consider.  Veritas Advisory, the only Capital Allowances experts to have advised on a property based ACS fund, consider the benefits.

The introduction of a further tax transparent vehicle, was a move by George Osbourne and HM Revenue & Customs to present a carrot to UK property funds, to bring their investments back onshore.  This was despite the fact that for many years previous investors already had two alternative tax transparent vehicles to opt for, namely the property authorised investment trust (PAIF) and real estate investment trust (REIT).   So what does the ACS offer that these two vehicles do not.

The ACS provides an option for both fund managers and institutions wishing to operate a UK platform as an alternative to authorised unit trusts and open ended investment companies.  There are two forms of an ACS, partnership or co-ownership, with the latter being the more popular as it is easier to administrate and can be set up as an umbrella for multiple sub-funds.  The ACS is designed to compete directly with offshore vehicles by offering equal tax advantages.

Tax transparent vehicles have traditionally been aimed at pension funds enabling them to withhold tax but there is a wider list of benefits.

Benefits of ACS

Up until the last budget, the two biggest hurdles facing those funds considering a move to ACS was SDLT and capital allowances.  Subject to Royal Assent, expected in July 2016, seeding relief will be given for co-ownership ACS vehicles and no SDLT will be payable on the issue, transfer or surrender of units in a co-ownership ACS from the same date.  As with a PAIF the fund is open-ended but there are no investment restrictions in the level of property to be held and so can be formed of multiple unit classes.

One of the main draws in converting is that it will enable the fund manager to pool and administer multiple funds under the one tax transparent umbrella.  This is particularly attractive to enable fund managers to head off regulatory changes and increase administration cost pressures.  Whilst there is no doubt that such a move comes with some initial pain, the long term gains may for some, make it a worthwhile option.