New changes to Capital Allowances – Financial Bill 2012

The new financial bill of 2012 has arrived and as we expected the Government have made even more changes to Capital Allowances. It is however, better news than we thought! The word on the street was that Capital Allowances were going to be scrapped in April 2012, however after looking into the new financial bill this doesn’t appear to be the case! Great news!

The main change in the new financial bill of 2012 is that the Government are phasing in a mandatory pool of capital allowances which must be completed at the point of sale for all commercial properties. This will come into force April 2014 and basically means that all commercial property owners who are selling a property will need to settle and agree on their capital allowances for the property with the new buyer. This will be a major part of any commercial property sale going forwards.

What does that actually mean for you as a commercial property owner?

You will soon have a legal obligation to record and pool the Capital Allowances on the expenditure of fixtures and fittings of your business. In simple terms, you will need to keep a record of all work done to your commercial property that is claimable under the Capital Allowances Act.
• Currently it is your choice whether or not to claim Capital Allowances, in 2014 you will have to acknowledge that Capital Allowances exist and deal with them when you are selling your property.
• If you are buying a commercial property the seller will have to do a Capital Allowances audit (CAVR) before you purchase the property and decide what to do, depending on previous Capital Allowances claims and any tax relief claimed.
• The phasing in of this new development is being done between now and 2014. After this it will be mandatory to deal with Capital Allowances and you will lose the right to claim Capital Allowances in the future for the building.

Capital Allowances from April 2014 onwards..

• A Capital Allowances Valuation Report (CAVR) must be produced prior to the sale of the commercial property
• Both parties involved in the sale (seller and buyer) have a maximum of 2 years to agree a value of the fixtures and fittings of the property. There are various things that affect how your Capital Allowances are calculated and what this means during the sale of the property. We can explain this over the phone and give you information to suit your circumstances, so call one of our consultants on 0161 968 2051 to discuss what this means for you.
• To complete a Capital Allowances report and be able to sell your property after April 2014 you will need to fill in a SA198 (for freehold) or an SA199 (for leasehold) form which are part of the Commercial Property Standard Enquiry (CPSE) documents required.

We recommend that you speak to a Capital Allowances specialist about your options. Remember it is your legal right to claim tax relief and in some cases tax rebates. Capital Allowances are an asset to your business and were brought out as a stimulus to the economy to help businesses to save money and to grow.

To speak to one of our specialist consultants now call 0161 968 2051 to discuss your options.