Capital Allowances

Capital Allowances

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 I bought a business premises in January 2011 using a 50000 loan.

Can I claim the full amount as capital allowances on my SA100 tax return?

Thanks

Replies (7)

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By George Attazder
10th Oct 2011 15:36

No

The expense in acquiring your business premises won't qualify for capital allowances.  You will be able to deduct the cost from the sale proceeds in calculating any future capital gain, and you can deduct the interest you are paying on the loan from your business profits.

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By Windy Wendy
10th Oct 2011 15:48

 

 

Thank You for clearing that up.

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By dunhamsjd
10th Oct 2011 16:20

Not quite true

Qualifying items of plant & machinery that are inherent within the premises, e.g. electrical installations, heating systems, will be allowable and available either as part of the AIA or added to the relevant capital allowances pools.  They are calculated as a "just apportinment" of the prurchase price unless any restrictions apply to claims made by prior owners.

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By George Attazder
10th Oct 2011 16:28

Oops...

... yes, I'd responded a little too hastily!

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By Windy Wendy
11th Oct 2011 09:06

It's complicated isn't it.

So I cant claim for the purchase, but if I have installed anything within the premises, I can claim the cost.

 

Thanks for the help

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By George Attazder
11th Oct 2011 10:39

Kind of...

... certainly if you've installed anything constituting "plant and machinery", then that will be eligible for capital allowances.

The point Stephen was making though is that it is inherent in most premises that there are items in those premises that do constitute "plant and machinery" and a proportion of the £50k that you have paid could be attributed to those items and capital allowances then claimed.  The difficult bit is then "how much?", which is Stephen's specialty.  I don't have the detailed knowledge he has, and perhaps he will be back to provide elaboration, but broadly:

at one end of the scale, if you've bought an empty warehouse for your £50k the amount of plant and machinery within it will be minimal and it probably isn't worth pursuing a claim.at the other end of the scale if you'd bought a small (and cheap) hotel, it's probable that a reasonably significant proportion of the expense could be attributed to plant and machinery.in between, something like office premises could vary considerably.

My gut instinct on a £50k spend is that, unless you want to take a complete punt, it's probably not worth pursuing a claim.  Stephen, who is the expert, might well disagree though.

I do think that you'd do well to seek some sort of professional guidance, so that you do maximise your entitlement to allowances.

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By Windy Wendy
11th Oct 2011 12:45

 

 

Again, many thanks for the help.  It is actually a shop premises which was empty when i bought it.  I am now trading as a florist from the premises.

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