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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: Matt Bell

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.

An additional headache where historic building stock is being upgraded to meet the new MEES requirements is addressing contaminants on site, such as asbestos.  Land Remediation Relief (LRR) provides a welcome incentive for developers and investors to offset that cost, by obtaining 150% tax relief and here we look at its application and how to claim.

Whilst this form of tax relief has been around for many years, the level of claims made against it is relatively low compared to other forms of tax relief for property related expenditure.  This can be put down in part to the fact that it is an elected form of tax relief, which is not present on most standard tax return forms and so unless your accountant recognises what expenditure to look out for, which when lumped in with other contractor’s costs, invariably it gets overlooked and the tax relief is missed altogether.

The legislation states that a substance which can “cause relevant harm” may qualify for this tax relief.  Typically asbestos is known to qualify but often the extent of the legislation is not appreciated, with Japanese Knotweed, long term derelict land (including foundations), arsenic, radon and underground gases examples of what may attract tax relief.

As long as you are not the entity or connected to the entity responsible for the original contaminant and a UK Corporate (not an individual or partnership), then a claim for LRR may be made. Unlike capital allowances, a developer can also claim as well as an investor, which is particularly relevant to housing developers looking to develop contaminated sites.

It is worth highlighting however that investors must make an election to claim LRR within 2 years of the tax year end in which the expenditure is incurred, which allows a degree of retrospective reviews to take place. The relief must be utilised in the year of expenditure; if loss making in that year a tax credit is available instead.

If you would like Veritas Advisory to provide an indicative free initial assessment of your expenditure, then please contact one of our Directors (https://www.veritasadvisory.co.uk/about-us/).