Capital Allowances

Capital Allowances

PresentingPresenting

Commercial Property Commercial Property

UK&EU Furnished Holiday LetsUK&EU Furnished Holiday Lets

Useful InformationUseful Information

CA10050 - Introduction: CA10050 - Introduction:

Where to find the capital allowance legislationWhere to find the capital allowance legislation

The capital allowances legislation is in the Capital Allowances Act The capital allowances legislation is in the Capital Allowances Act 2001 (CAA01). Before that it was mainly in CAA90 apart from the 2001 (CAA01). Before that it was mainly in CAA90 apart from the legislation about patents and know-how, which was in ICTA88 legislation about patents and know-how, which was in ICTA88 Chapter 1 Part XIII.Chapter 1 Part XIII.

Useful LinksUseful Links

http://www.hmrc.gov.uk/manuals/camanual/index.htm.

http://www.hmrc.gov.uk/manuals/camanual/CA21000.htm

http://www.hmrc.gov.uk/manuals/camanual/CA26000.htm

http://www.hmrc.gov.uk/manuals/camanual/ca22320.htm

Capital AllowancesCapital AllowancesCapital Allowance, this is the name given to the tax relief available on all UK commercial, UK FHL’s and EEC FHL properties in relation to items that are classified as being part of the intrinsic fabrication of the building.

Experience shows that many commercial property purchases and subsequent developments i.e. refurbishments, conversions & extensions, are conducted without identifying all eligible items of plant & machinery and therefore potential claims for Capital Allowances have been missed.

There is no time bar on this exercise, as long as the items are still in use for the purpose of the trade it may be possible to claim tax relief for expenditure dating back to when the property was first acquired.

Pointers Capital AllowancesPointers Capital Allowances

•Capital Allowances•Plant & Machinery•Moveable / Immovable•Installations

Pointers Capital AllowancesPointers Capital Allowances

•Do You Qualify?•Tax Payer / Making A Profit•Affordability – (to pay invoice)•Original Purchase Price - Minimums•Subsequent Expenditure•Location•Lettings – 140 + 70 days (change)

Items to look for Items to look for

Items to look forItems to look for

UK Commercial CriteriaUK Commercial Criteria

•Is the Company / Individual that owns the property liable for UK tax?

• Was the original purchase price in excess of £150,000?

• Does the individual or the company expect to make a profit this year?

UK-Capital AllowancesUK-Capital Allowances

We are gearing claims aimed at the initial purchase price and the associated installations

Plant & Machinery strip outHeating InstallationsGas InstallationsElectrical InstallationsElectrical AppliancesProtective InstallationsCommunications InstallationSecurity InstallationsHot & Cold Water InstallationsDisposal InstallationsVentilation & Air Con InstallationsInternal Fittings

FHL-Capital AllowancesFHL-Capital AllowancesFollowing the April 2009 Budget the tax advantages of Furnished Holiday Let (FHL) status have been extended to cover properties within the European Economic Area (EEA).

For the first time, owners of European FHL's can claim capital allowances. There is only a limited time period to take advantage of this opportunity so owners must act swiftly.

If your FHL is situated in the EEA and is available for commercial letting and you are a UK taxpayer then you are just a few steps away from a potential tax rebate.

FHL-Capital AllowancesFHL-Capital Allowances

We are gearing claims aimed at the initial purchase price and the associated installations

•Heating Installations•Electrical Installations•Communications Installation•Security Installations•Hot & Cold Water Installations•Disposal Installations•Ventilation & Air Con Installations•Internal Fittings•Furniture•Pool

FHL-CriteriaFHL-Criteria

• UK Resident

• Property Located in EU

• Available for let 140 days

• Let for 70 days a year

• April 2011: Changes

• Available for 210 Days

• Let for 105 days a year

• Offset against same business income

DocumentsDocuments

• Product Brochure

• Application Form

• Matrix x 4

• Slide Show

• HMRC Notes

• Guidance Notes

• Marketing Letter

• www.caatrl.com

Capital AllowanceCapital AllowanceProcessProcess

Check QualificationCheck QualificationPresent SolutionPresent SolutionComplete ApplicationComplete Application(collect survey cheque where applicable)(collect survey cheque where applicable)Send to Head OfficeSend to Head OfficeResearch Carried OutResearch Carried OutSurvey ArrangedSurvey ArrangedReport Produced along with InvoiceReport Produced along with InvoiceTax Rebate Applied for by Client AccountantTax Rebate Applied for by Client Accountant

Survey FeesSurvey Fees

UK CommercialUK Commercial£750.00 to £2,500 plus VAT£750.00 to £2,500 plus VATPayable with report feePayable with report fee

Furnished Holiday LetsFurnished Holiday Lets£450.00 to £650.00 plus VAT£450.00 to £650.00 plus VATPayable on submission of application Payable on submission of application

CA-Costing ExampleCA-Costing Example

£650,000 Purchase Price £650,000 Purchase Price £162,500 Allowances Identified (25%)£162,500 Allowances Identified (25%)

£34,125 For Limited Company (21%)£34,125 For Limited Company (21%)£81,250 For Higher Rate Tax Payer (50%)£81,250 For Higher Rate Tax Payer (50%)

£8,125.00+vat = Client Report Fee£8,125.00+vat = Client Report Fee£995.00+vat = Survey Fee (£995.00+vat = Survey Fee (UK-FHLUK-FHL))

Members CommissionMembers Commission

£650,000 Original Purchase Price £650,000 Original Purchase Price £162,500 Allowances Identified (£162,500 Allowances Identified (25% guide25% guide))£8,125 = Client Report Fee£8,125 = Client Report Fee£995.00+vat = Survey Fee (£995.00+vat = Survey Fee (UK-FHLUK-FHL))

£2,437 £2,437 = Members Commission (30%)= Members Commission (30%)

Members receive = 30% of 5% report feeMembers receive = 30% of 5% report fee

Test CasesTest Cases


Plant Amount

Disposal Installations £4,101

Water Installations £6,829

Heating & Air Conditioning Installations £29,490

Ventilation Installations £3,855

Electrical Installations £44,897

Communication Installations £14,946

Security Installations £1,025

Fixed Internal Fittings £17,928

Total £123,073


Test CasesTest CasesPlant Amount



Heating & Air Conditioning Installations £31,620

Ventilation Installations £4,135


Protective Installations £858

Communication Installations £15,392

Fixed Internal Fittings £13,702

Total £125,037


Test CasesTest CasesAPPENDIX B

ANALYSIS OF QUALIFYING PLANT EXPENDITURE

SECTION 23 LIST 'C' CAPITAL ALLOWANCES ACT 2001

APPORTIONMENT OF ACQUISITION COST

2/2a Old Market Place

Plant Amount



Gas Installations £1,399

Heating Installations £22,013

Ventillation Installations £2,662


Protective Installations £578

Security Installations £2,152

Internal Fittings £8,207

Total £64,257

AdvertsAdverts

StatementStatement

Everybody who has commercial premises should investigate the Capital Allowance potential that is an inherent part of that property. Many believe they have already claimed the maximum but we know this is rarely - if ever - true... and it is likely to be thousands of pounds you did not realise you had.

Processing CasesProcessing Cases

Send to: CAATRLSend to: CAATRL2 Old Market Place2 Old Market PlaceAltrinchamAltrinchamCheshire Cheshire WA14 4NPWA14 4NP0161 928 9961 – 0161 850 17500161 928 9961 – 0161 850 [email protected]@caatrl.comwww.caatrl.comwww.caatrl.com

Business

Capital Allowances