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Case study: capital allowances

A client of ours bought a new property from a developer for £4.2million, which was part warehouse, part office building. This property generated £350,000 in rental income per annum.

The client  estimated the value of plant and machinery in the building was between £200,000 and £300,000, but after a surveyor attended the property, a claim for capital allowances was submitted to HM Revenue & Customs for £680,000.

HM Revenue & Customs agreed a claim of £610,000, thus saving our client £250,000 in tax (this being the 40% tax that would have been payable if the £610,000 claim had not been submitted).

There have been comments in the press  that the majority of companies and individuals who purchase commercial property for investment or occupation miss out on capital allowances.

Anyone investing in commercial property may be able to make a big tax saving by claiming back the cost of plant and machinery within the premises, using capital allowances.

For more information or help from one of our property and real estate specialists, please contact us using our enquiry form.