Insights
Seminars & Events
News

Latest Insights

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

Use Capital Allowances To Reduce Your CGT & Taxable Income

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.

07 Sep 2020

Written by: Clive Curd

Archive

Latest News

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

Veritas Support Dog Rescue Charity

27 May 2020

Veritas Advisory have chosen to be a supporter of Candy Cane Rescue, a charity rescuing exported greyhounds and other dogs from the meat markets in China, and for which Veritas Director David Gibson is a Trustee.

There have been several changes to how offshore investors are taxed and nearly all have resulted in increasing the tax payable, reducing the returns on investment; consideration of Capital Allowances to reduce their tax bill should always be made and for offshore companies the savings equate to £190,000 in every £1,000,000 of expenditure incurred.

There have been two main changes to how offshore investors are now taxed:

From April 2019 – Offshore Investors Subject to Capital Gains Tax

Offshore investors are now taxed on gains on their property from April 2019 but it is likely that the effects of this won’t be felt until 2021 or beyond.

Capital Allowances though can be used to reduce the amount of capital gains tax on sale, with SPVs able to potentially further enhance their savings by way of balancing allowances.

From April 2020 – Offshore Investors Brought Within UK Corporation Tax Legislation

Whilst initially the tax rate has fallen from 20% (non-residents) to 19% (UK corporation) there are rumours that the corporation tax rise will be increased in the coming months, potentially up to 24%.

This coupled with restrictions in both interest rate relief and the amount of losses that can be carried forward has given rise to increased tax liabilities for offshore investors, reducing returns on investments.

Capital Allowances are the only way to reduce the taxable profit and there are more opportunities than ever before to reduce both tax on income and on the gain at sale.

Opportunities to Claim

Offshore companies have significant opportunities to claim tax relief through the following:

  • Unclaimed allowances on historic expenditure; there is no time limit to making a claim on historic expenditure, as long as you still own the fixtures
  • New Structures & Buildings Allowance
  • Land Remediation Relief at 150%; this can only be claimed by UK companies so previously excluded offshore entities

Offset Taxable Income & Capital Gains Tax

As an example a property is acquired for £10,000,000 and sells for £12,000,000 after 3 years. Taxable income, per annum, after all deductions, is £300,000.

The tax on all 3 years income could be offset using Capital Allowances (£900,000 x 19% = £171,000).

In addition, the tax on the capital gain (£2,000,000 x 19% = £380,000) could also be reduced by writing down at the relevant rate. If the company were an SPV and ceased to trade then it may also be possible to enhance the tax savings by claiming a balancing allowance.

Capital Allowances More Complex

The Capital Allowances legislation is becoming more complex so there will be changes required by investors to capture these allowances. Every transaction is unique, has a valuation aspect and requires legal entitlement checks, and together with the additional due diligence requirements of Structures and Buildings Allowances they are not guaranteed or simple to claim.

A suitable qualified, regulated, and experienced advisor should be part of the team for every transaction.

What steps should be taken?

  • Acquisitions – carry out due diligence at Heads of Terms stage
  • Disposals – check if you have claimed and retain the benefit using a S198 election
  • Developments / refurbishments /fit outs – review and claim all expenditure
  • Historic Expenditure – schedule list of properties and dates and quantum of historical spends