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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

Abstracting an additional benefit on sale can often be overlooked when it comes to marketing on any unclaimed Capital Allowances.  Here we set out the circumstances when this should be considered and how to go about it.

The position adopted for Capital Allowances on the sale of a property is largely dependent upon the extent that the entity can claim itself.  For non-tax paying entities such as developers who hold the property as trading stock or pension companies and who cannot claim, they are able to market on the benefit of any unclaimed Capital Allowances at the point of sale.

For a company, individual or investor they have a choice, which revolves around whether they are better off retaining the unclaimed benefit or to market it onto a buyer.  It should be noted that even where no prior claim has been made, then there is still the ability to submit a claim with an amended tax return before completing on the deal.

The structure of the holding entity can also dictate the best strategy to adopt.  For an entity or individual which will still have an alternate income post sale of the property, then the legislation provides the ability to elect to retain the unclaimed allowances, by entering into a section 198 election with the buyer within 2 years of completion.

As a side note, it is one thing making adequate contract provision to enter into a section 198 election, but if an executed version is not submitted within 2 years, then you could face clawback of the relief or being found in breach of contract.  The task of submitting the election all too often falls between the lawyer, accountant and client, so knowing who is responsible for this task is critical.

Conversely, if the property is held within an SPV, then with no future income it would often be beneficial to pass on any unclaimed Capital Allowances.  This ideally should be raised within the heads of terms, in order that a value can be extracted on sale and whilst there is no direct correlation to achieving a higher sale price, by bringing it to the table, it will always help with negotiating the best deal.

With new rules introduced in 2014, the unclaimed Capital Allowances needs not only consider the sellers own expenditure in terms of entitlement to claim, but also that of past owners.  Sellers can often make claims on a previous owner’s past expenditure, whether that be an acquisition or refurbishment.  Any such unclaimed allowances should be identified and either claimed, marketed across or a combination of the two.

Veritas Advisory offers a service to prepare market sheets to quantify unclaimed Capital Allowances for heads of terms.  Please contact one of our directors should this service be of interest.