Insights
Seminars & Events
News

Latest Insights

£1,000,000 AIA Extended for 12 Months

In a positive move the Government has today announced that the current Annual Investment Allowance (AIA) of £1,000,000, which was due to revert down to £200,000 on 1 January 2021, will be extended for a further year to 1 January 2022.

13 Nov 2020

Written by: David Gibson

Veritas Open Liverpool & Manchester Offices

We are pleased to announce the opening of two offices in Liverpool and Manchester to strengthen our existing offering and provide a local presence to both existing and new clients.

18 Sep 2020

Written by: David Gibson

Enhance SPV Tax Relief With Capital Allowances

When an SPV sells it's sole property asset significant tax relief can be realised on sale using Capital Allowances. Normally they are written down at 18% or 6% on a reducing balance basis but on cessation of trade a balancing allowance may be due, accelerating the timing of the tax savings, as per our example in this article.

07 Sep 2020

Written by: Clive Curd

Archive

Latest News

£1,000,000 AIA Extended for 12 Months

13 Nov 2020

In a positive move the Government has today announced that the current Annual Investment Allowance (AIA) of £1,000,000, which was due to revert down to £200,000 on 1 January 2021, will be extended for a further year to 1 January 2022.

Veritas Open Liverpool & Manchester Offices

18 Sep 2020

We are pleased to announce the opening of two offices in Liverpool and Manchester to strengthen our existing offering and provide a local presence to both existing and new clients.

Enhance SPV Tax Relief With Capital Allowances

07 Sep 2020

When an SPV sells it's sole property asset significant tax relief can be realised on sale using Capital Allowances. Normally they are written down at 18% or 6% on a reducing balance basis but on cessation of trade a balancing allowance may be due, accelerating the timing of the tax savings, as per our example in this article.

Use Capital Allowances To Reduce Your CGT & Taxable Income

07 Sep 2020

Until recently many offshore investors did not claim capital allowances due to having little or no tax liability. However, as offshore investors are now within the UK corporation tax legislation and pay tax on their capital gain, consideration of Capital Allowances to reduce their tax bill should always be made.

Veritas Article in Property Week Magazine

08 Jun 2020

As part of the Property Week magazine Covid-19 support hub Veritas Advisory director Nolan Masters highlights how using Capital Allowances can help generate significant tax savings and ease cash flow problems.

Veritas Article in Taxation Magazine

03 Jun 2020

Veritas have published an article in Taxation Magazine setting out how to boost cash flow by identifying property tax reliefs. Key points addressed in the article include reviewing historic expenditure where allowances haven't been fully claimed, using capital allowances to mitigate future capital gains, the window of opportunity to claim and the benefit of utilising the annual investment allowance of £1,000,000.

Capital Allowances Guide for PAI Member Firms

01 Jun 2020

Veritas Advisory director Clive Curd has prepared a Capital Allowances guide for all member firms of the Independent Commercial Property Agents Network (PAI) for which Veritas Advisory are the recommended Capital Allowances advisor.

4 Simple Steps to Reduce Income Tax

27 May 2020

The practical aspects of partnerships and individuals claiming on historic expenditure, if there are any time restrictions to submit a claim and how to overcome potential barriers such as lack of supporting detailed cost information are often unclear. We set out 4 simple steps to follow in order to realise these tax savings

4 Simple Steps to Reduce Corporation Tax

27 May 2020

Companies are often unclear on the practical aspects of claiming against historic expenditure, if there are any time restrictions to submit a claim and how to overcome potential barriers such as lack of supporting detailed cost information. We set out 4 simple steps to follow in order to realise these tax savings

With the multitude of legal and commercial terms to agree to get a deal over the line, capital allowances can often be a casualty with a desire to not want to slow or delay a deal.  It can also be that for some sellers they cannot or do not want to assist on passing over any known or often more to the point, unknown capital allowances, so you end up with agreeing to an election under s198 of the Capital Allowances Act (CAA) 2001 for £2.00.  The effect of which is to say that, to the extent the seller had entitlement to claim, they are not passing over any unclaimed allowances to the buyer.

Where this is the case, then it can automatically be felt that there is no further tax relief for capital allowances available on the deal, but that is often not the case.

If the contract is silent, then there is still a two year window in which a s198 election can be entered into to pass across any unclaimed capital allowances, but without a contract clause provision, it would be reliant on the goodwill of the seller, which is often achievable, as in most cases there is no downside for the seller.  Significant tax relief can be gained where a known capital project has been undertaken, such as a recent refurbishment, as this often will not have been claimed on and therefore the buyer can undertake the quantification and elect across the benefit within 2 years of completing.

If a past owner has paid a capital contribution to an incoming tenant, the landlord has the entitlement to any capital allowances on that payment and it falls outside of the s198 election restriction.  Contribution allowances instead pass across at the tax written down value or if not claimed, then the buyer can make a claim.

The introduction of Integral Features as a new allowance gave rise to the ability to claim on new headings of fixtures, such as cold water and electrical systems and so if the purchase represents the first after the introduction on the 1 April 2008, then the buyer has an unrestricted claim on those qualifying fixtures as they have not been claimed previously.  Overage claims can amount to up to 15% of the purchase consideration and is calculated based on a valuation exercise apportioning the price paid between a cleared site land value, rebuild cost and value of the qualifying fixtures.

There is a more unusual quirk in the capital allowances legislation, which is often overlooked, which is to provide the new buyer with the entitlement to claim on those acquired fixtures which have been installed by a tenant prior to purchase.  Should the tenant be a non-tax paying entity such as a government body and have spent money on their own fit out, then the new buyer can claim on those fixtures as there has been no prior right to claim and the items become fixtures in the property.

Additionally we have often reviewed historic acquisitions pre-dating the capital allowances legislation changes in 2014, and on which no claims have been made, when the legislation requirements on acquisitions weren’t as stringent as they are now, giving rise to claim opportunities which may not be possible if the property was acquired today.

These are just some examples of the additional claim opportunities that can arise, so all is not lost, and it is still a worthwhile exercise to engage with a capital allowances specialist who will be able to establish any potential allowances in a short space of time.

Should you have a past property purchase that hasn’t had a detailed capital allowances review undertaken, then please contact one of our directors for an initial consultation.