New rules on Capital Allowances for commercial property

Any new-build or refurbishment project on a commercial property will include elements that attract tax relief.   These are known as Capital Allowances and are available on the buidling's systems such as heating, cooling, electrical systems as well as fit-out items such as data cabling & kitchens.  For example 35% of the construction costs of a new build office may be tax-relieved and when refurbishment it may be higher.

When buying an existing commercial building these tax reliefs may not have been claimed so a review by a specialist in Capital Allowances surveyor could uncover some valuable tax reliefs.   When buying a property there may be an opportunity to apportion tax relief from the price paid which could mean that up to 20% of the price could become tax relief.     The tax rules on this change from 2014.  The ability to make these claims, however, might be helpful to you if you require bank funding as it will  mean that the borrow has less tax to pay and this could demonstrate that the borrower can more easily cover the loan. 

When selling a property and allowances have already been claimed, new rules from 2012 require the parties to enter into an election if any allowances are to be passed on.   After 2014 it is possible that any unclaimed allowances could be lost.

If you require advice on Capital Allowances, detailed advice should be obtained from a specialist Capital Allowance advisor.