Sage advice from Capital Allowance Review Service for professionals advising clients on commercial property acquisitions. Here’s what they said in a recent news article:
We are aware that, due to its complexity, correct capital allowance advice in commercial property transactions is not always given. Many commercial property owners have not claimed their full entitlement of capital allowances making it very difficult to satisfy legislation. This means businesses with commercial property interest simply miss a substantial tax saving.
Failure to address capital allowances when buying commercial property can result in a significant amount of capital allowances being lost forever.
As a purchaser, steps must be in place before you buy the property. If a seller has failed to claim capital allowances that they were entitled to, it’s important the Sales Agreement states the intention to pool its expenditure and transfer Capital Allowances via a Section 198 Election.
When a property changed hands before April 2014, there was no requirement for Sellers and Purchasers to agree on a single disposal/acquisition value for ‘Property Embedded Fixtures and Fitting’s‘ (PEFFs) within the overall sales price.
What’s more, there was no time limit on when, if ever, PEFFs are highlighted, however, this has now changed for transactions post-April 2014.
It is important to understand these rules and how they affect the entitlement to Capital Allowances for PEFFs.
We offer new legislation support to all property advisors and those with commercial property interests and encourage you to make the most of new opportunities.
Could you or your clients be affected?
Whether your clients are buying or selling, with the right advice pre-completion, a valid S198 Election can be completed post-completion, ensuring their advice is protected and your client’s wishes are secured.
If your clients are buying or selling commercial property and require legislation support, please get in touch.