A Guide to Property Capital Allowances
There are assets in a commercial property that is for sale or lease and if a company or any individual decides to buy, improve, or lease that commercial property, then, the company or the individual can claim or can be eligible to receive capital allowances on these assets. It is not possible for an operational property to not have assets that can be used for claims.
To be eligible, there must be durable assets with an expected life of more than two years, which are not part of the premises themselves. These are the tools used to conduct the business rather than the structure housing it. For example, you bought a factory with existing refrigeration plant but your business in that factory does not need it, then you would not be ale to make a claim against it.
Vehicles, large tools, machinery, furniture, furnishings, computers and telecommunications equipment, electrical goods, safety and security equipment, software with working life of more than 2 years, bathroom equipment, swimming pools, storage equipment and more are the assets that you can use and claim allowances for. There is another category that are also eligible for capital allowances and this includes inefficient cars, power supply systems, water supply systems, lifts, escalators, and people movers.
Things falling into the second category are integral features except the inefficient cars.
If you have already seen the assets that are eligible for capital allowances, what do you need to do next? Once the value of the assets have been quantified, they may be claimed back at the writing down allowance of 20%. So, if you are able to claim back 20% of the total claims this year, you can claim 20% of the remaining allowance each year on the succeeding years until the whole amount is claimed. The writing down allowance for the second category is slightly different because the amount you can claim each year is just 10% of the allowance or remaining allowance in subsequent years. Assets in the second category will take longer for the whole allowance to be claimed.
So, in summary, capital allowances are an easy yet surprisingly little known way to reclaim your money. If you think you have some relevant claims, then a capital allowance consultancy could dispatch a qualified surveyor to identify and quantify claims. Then after contacting your accountant, you may reclaim your money from the treasury.
If you are thinking of buying a commercial property, then you can be eligible for property capital allowances.