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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

When HMRC decided to move the goal posts, stating that students went to University not just to study but to live, it meant that the interaction of capital allowances and the definition of dwellings clashed. Here we explain that despite this change in guidance, there still exists a great deal of benefit in claiming capital allowances on student accommodation property.

As an alternative market for property investors, typically with higher returns than for a typical core investment, combined with the supply and demand economics, many investors are developing purpose built student accommodation.

The one property sector for which claiming capital allowances are excluded from, is one which consists of your main dwelling home and so with the introduction of HMRC briefing 45/10, it categorised the cluster bedroom and studio as being deemed to be a dwelling and therefore ineligible for capital allowances.

It can be easy to overlook the fact that despite this change, the ability to claim capital allowances on student accommodation is still very much available to an investor. Typically, student accommodation buildings consist of clusters flats, but outside of that there are often communal corridors and shared facilities, such as common rooms, laundry, bike stores, plant rooms and management areas. These areas all fall outside of the residential definition and therefore, can still attract capital allowances.

The difficulty then is establishing the proportion of the building cost which can be treated as eligible versus non-allowable i.e. within the dwelling part of the property. It becomes even more complicated when you consider mechanical and electrical services which serve both dwelling and non-dwelling parts of the building.

On considering HMRC’s guidance it should also not be overlooked that for onsite campus student accommodation, the ability to claim on the bedrooms can still be considered providing certain criteria are met.

These often, high income producing assets, can take great benefit by maximising their claims for capital allowances either on behalf of the developing entity or alternatively, to pass over the benefit on disposal, to make a gain on sale.

Veritas Advisory have advised extensively on this expanding sector, including 10,000 rooms this calendar year; if you have any specific queries please contact Clive Curd our student accommodation specialist.