Capital Allowances for care homes

Capital Allowances for care homes

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A sole trader client owns and runs a residential care home which was purchased 4 years ago and has since been extended. They have been approached by a company who state that they are able to claim a large tax refund by claiming for greater capital allowances than have already been included on the Tax Return. The claim appears to be based on a survey which the consultancy firm will carry out to identify those items on which capital allowances are available but have never been claimed. The claim would have 2 parts:

1. Eligible items included in the purchase price of the business but not included in the amount paid for fixtures and fittings.

2. Items purchased by the builders for the extention but not itemised on their invoices.

My main concern is that by reallocating expenditure currently classified capital or enhancement I would be reducing the base cost for CGT purposes however the company concerned have stated the claim would not effect the base cost in any way - is this true?

I am also worried by the use of a survey to make a claim and wonder how the Inland Revenue react to this given that there are no receipts.

Has anyone come across these firms before and is the service they provide bonafide? Any advice would be greatly appreciated.

Thanks

Simon Oates

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By andy.white.crosherjames
27th Aug 2004 13:39

Capital allowances and CGT
We are a specialist CA consultancy and offer a CA maximisation service of this nature.

Claiming CAs does not affect your base cost for CGT except if you sell the property at a loss. Our website contains a technical briefings in this area.

Beware of paying too much for the service and using companies who do not carry out the correct technical checks. We employ surveyors specifically qualified in RICS tax allowances work and we work for a number of care home operators. We provide a free evaluation service to check the viability of any excercise for the client

See www.crosherjames.com for more information.

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