Capital Allowances Commercial Property and EU Furnished Holiday Lets

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

Pointers Capital Allowances Do You Qualify? Tax Payer / Making A Profit Affordability – (to pay invoice) Original Purchase Price – Minimums Subsequent Expenditure Location Lettings – days (change)

Items to look for

UK Commercial Criteria Is the Company / Individual that owns the property liable for UK tax? Was the original purchase price in excess of £400,000? Does the individual or the company expect to make a profit this year?

UK-Capital Allowances We are gearing claims aimed at the initial purchase price and the associated installations Plant & Machinery strip out Heating Installations Gas Installations Electrical Installations Electrical Appliances Protective Installations Communications Installation Security Installations Hot & Cold Water Installations Disposal Installations Ventilation & Air Con Installations Internal Fittings

FHL-Capital Allowances Following 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 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-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

Documents Product Brochure Application Form Matrix Slide Show HMRC Notes Guidance Notes

Capital Allowance Process Check Qualification Present Solution Complete Application (collect survey cheque where applicable) Send to Head Office Research Carried Out Survey Arranged Report Produced along with Invoice Tax Rebate Applied for by Client Accountant

Survey Fees UK Commercial £ to £2,500 plus VAT Payable with report fee Furnished Holiday Lets £ to £ plus VAT Payable on submission of application

CA-Costing Example £650,000 Purchase Price £162,500 Allowances Identified (25%) £34,125 For Limited Company (21%) £81,250 For Higher Rate Tax Payer (50%) £10, vat = Client Report Fee £ vat = Survey Fee (UK-FHL)

Members Commission £650,000 Original Purchase Price £162,500 Allowances Identified (25% guide) £10, = Client Report Fee £ vat = Survey Fee (UK-FHL) £2, = Members Commission (25%) Members receive = 25% of 6.75% fee

Test Cases

PlantAmount 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 Cases

PlantAmount Disposal Installations£4,398 Water Installations£7,323 Heating & Air Conditioning Installations£31,620 Ventilation Installations£4,135 Electrical Installations£47,610 Protective Installations£858 Communication Installations£15,392 Fixed Internal Fittings£13,702 Total£125,037

Test Cases

APPENDIX B ANALYSIS OF QUALIFYING PLANT EXPENDITURE SECTION 23 LIST 'C' CAPITAL ALLOWANCES ACT 2001 APPORTIONMENT OF ACQUISITION COST 2/2a Old Market Place PlantAmount Disposal Installations£1,696 Water Installations£1,752 Gas Installations£1,399 Heating Installations£22,013 Ventillation Installations£2,662 Electrical Installations£23,797 Protective Installations£578 Security Installations£2,152 Internal Fittings£8,207 Total£64,257

Adverts

Processing Cases Capitol Claims Evans Business Centre Dane Street Rochdale OL12 6XB Tel: Fax: Web:

Statement 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.