Corporate tax rates are set to increase by 30% from April 2023, this means property income and capital gains are exposed to higher taxes, therefore tightening investment margins and cashflow.
Capital Allowances can help aid property agents and their clients as follows:
1. Acquisitions – Capital Allowances typically increase yields by between 0.25% and 1%
- Capital Allowances are often overlooked in investment appraisals; however, we have advised on some recent transactions where the identification of available capital allowances has assisted in making the deal viable.
- Don’t assume clients have capital allowances advisors, especially overseas investors.
2. Asset Management / Leasing – Reduce Cost of Energy Efficiency Requirements
- From April this year commercial buildings must achieve a minimum ‘E’ efficiency standard. From 2028 it is proposed that rating will be ‘B’.
- Capital Allowances can typically reduce the net cost of capital expenditure by up to 45% for Partnerships and 25% for companies,
Action Points
Contact Veritas Advisory for free initial advice on the following:
- Acquisitions – Estimates of Capital Allowances and advice on legal entitlement to claim.
- Asset Management – Estimates of Capital Allowances and cash flow forecasts on developments, fit outs and refurbishments