Insights
Seminars & Events
News

Latest Insights

New Case Law – Gas Storage

A case Cheshire Cavity Storage 1 Limited and (2) EDF Energy (Gas Storage Hole House) Limited v The Commissioners for HM Revenue and Customshas been determined at the Upper Tax Tribunal (UTT).  Does a cavity formed to store gas satisfy the requirements to be allowed as plant?

25 Apr 2021

Written by: Clive Curd

Short on Time? Super Deductions in Brief

For those short on time, we have provided a bullet point summary of the key points, who can claim and considerations when claiming.

20 Apr 2021

Written by: Nolan Masters

Are Property Investors Invited to the ‘Super-Deduction’ Party?

The fanfare surrounding the announced ‘super-deductions’ was somewhat soured for property investors, in reading of a restriction on ‘leased’ plant and machinery.  Here we set out why for some investors, there is still a way to benefit from these generous temporary tax reliefs.

20 Apr 2021

Written by: Nolan Masters

Archive

Latest News

New Case Law – Gas Storage

25 Apr 2021

A case Cheshire Cavity Storage 1 Limited and (2) EDF Energy (Gas Storage Hole House) Limited v The Commissioners for HM Revenue and Customshas been determined at the Upper Tax Tribunal (UTT).  Does a cavity formed to store gas satisfy the requirements to be allowed as plant?

Short on Time? Super Deductions in Brief

20 Apr 2021

For those short on time, we have provided a bullet point summary of the key points, who can claim and considerations when claiming.

Are Property Investors Invited to the ‘Super-Deduction’ Party?

20 Apr 2021

The fanfare surrounding the announced ‘super-deductions’ was somewhat soured for property investors, in reading of a restriction on ‘leased’ plant and machinery.  Here we set out why for some investors, there is still a way to benefit from these generous temporary tax reliefs.

Claiming Super Deductions – Benefit & Restrictions

20 Apr 2021

In an unexpected offer of generosity, as part of the Chancellor’s spring budget, temporary ‘super’ capital allowances were announced with a view to kick start the post covid recovery.  Here we set out the requirements for making a claim and the benefit on offer.

Veritas in AI Collaboration with Brunel University

30 Mar 2021

Following a recent application through Innovate UK Veritas Advisory, together with Brunel University London, are developing AI-assisted technology to aid SMEs to more efficiently collect and categorise data for tax assessment and tax relief

New 130% Super Deduction Explained

06 Mar 2021

Veritas have been in direct correspondence with HMRC with regards to the new 130% Super Deduction and specifically how it is applied on leased assets. Despite initially appearing as an exclusion on all leased assets, which would encompass most investment properties, there are opportunities to claim the new allowance.

Capital Allowances on Freeports

15 Dec 2020

The Government have issued the responses to the Freeports Consultation, originally published in February 2020, and will offer Enhanced Capital Allowances in Freeport Tax Sites plus a Freeport-specific, Structures and Buildings Allowances.

Society of Trust & Estate Practitioner (STEP) Webinar – Jersey Branch

12 Dec 2020

Veritas Advisory Directors Clive Curd and David Gibson presented on Capital Allowances to the members of STEP Jersey, highlighting the increased importance of Capital Allowances to offshore investors, and how to maximise the potential tax reliefs available including tax planning for future liabilities such as Capital Gains Tax.

£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.

Single Purpose Vehicles (SPVs) are able to enhance the amount of tax relief when selling an asset by claiming a balancing allowance. Often overlooked, the simple example shown below demonstrates why Capital Allowances should be considered by all SPVs to offset both current and future tax liabilities.

An investor creates an SPV to forward fund an office development for £5million.

After 2 years of rental income of £400,000 per annum, the SPV receives an offer and sells for £6million, closing the company and ceasing the trade.

The interest and other associated acquisition costs equal the rental income for the first 2 years, so there has been no taxable profit on income during ownership.

However, assuming there are £1million of capital allowances available within the property the following tax relief can be realised.

Land purchase                                                                                          £1,000,000

Construction Cost                                                                                  £4,000,000

Total Development Cost                                                       £5,000,000

 

Tax Computation On Sale Without Capital Allowances (Year 3)

Sale proceeds                                                                                           £6,000,000

Less, base cost of development                                              (£5,000,000)

Gross Profit on Sale                                                                £1,000,000

Tax Due @ 19% corp tax rate                                                     (£190,000)

Net Profit on Sale                                                                      £810,000

 

However, £1,000,000 of Capital Allowances have been identified within the property.

Tax Computation On Sale With Capital Allowances (Year 3)

Sale proceeds                                                                                          £6,000,000

Less, base cost of development                                              (£5,000,000)

Gross Profit on Sale                                                                £1,000,000

Capital Allowances Balancing Allowance                     (£1,000,000)

Taxable profit after Capital Allowances                            £0

Tax Due @ 19% corp tax rate                                                      (£0)

Net Profit on Sale                                                                      £1,000,000

 

Increased Return on Investment                                 £190,000

 

The following steps must be taken to claim the capital allowances

  • Appoint CA advisor before transaction takes place
  • Carry out due diligence on all new acquisitions
  • Claim on all current and future expenditure
  • Review all historic acquisitions on current properties
  • Review all historic capex on current properties