Capital Allowances - FHL

Capital Allowances Claim on FHL

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We have recently purchased a property which qualifies as a Furnished Holiday Let in the first year of trading. I am keen to claim Capital Allowances on the plant, fixtures and fittings etc, and as a qualified accountant and tax adviser I would prefer to do the claim myself, but it is a little out of my normal comfort zone. I agree that it would therefore ususally make most sense to appoint a specialist firm to handle a survey and CA claim, but it is possible that the circumstances could change in the near future and the property would no longer qualify as a FHL, thus triggering a balancing charge, and a reduction in the original tax saving which may outweigh the profesional fees paid for the survey and CA claim.

The property was a private dwelling before we purchased it and as far as I can ascertain from the history, it has never been in a use which would have afforded a CA claim. There was therfore no requirement for a value to be placed on the F&F when the property was purchased, but this doesn't preclude a claim now as far as I understand.

I am comfortable with what qualifies as plant (including those items that the Capital Allowances Specialists say we thick accountants don't think of!!), but my only concern is how we arrive at the current value of the plant. Does anyone have experience of this and what formulae for depreciation might normally be applied in such instances? I asume a valuer would look to give each item an estimated original purchase price, then depreciate each asset in line with it's assumed age? But what rates are acceptable to HMRC?

Or am I missing something fundamental in how the value would be arrived at?

All help or any other tips in relation to this will be greatly appreciated.

Replies (3)

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By Wilson Philips
12th Mar 2019 17:04

My first action would be to get a handle on just how much tax would be saved (based on the difference between a judicious estimate of your own and a professionally obtained valuation). You might find that the end doesn't justify the means.

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By plummy1
15th Mar 2019 11:40


I own a capital allowances claims company (no offence taken). I would strongly advise against trying to undertake a claim yourself. In our experience HMRC love to jump on an accountant who has had a go at this themselves. Without giving away any secrets there is a well established process accepted by HMRC and the Valuations Office for undertaking a Section 563 Reasonable Apportionment of your purchase cost.

From a fees perspective we take a pragmatic approach with the client and ensure our fees are going to make sense in their particular tax circumstances. For smaller value purchases we regularly undertake claims on a desktop basis which reduces our costs but does require a little more support from the client i.e. internal photos and a scaled plan.

I would be happy to provide you with a competitive quotation. If interested please e-mail me directly at [email protected]. Apologies if this counts as a marketing response.

Thank you

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By FrogHappy
15th Mar 2019 12:29

Hi John

Thanks for your comments, I'll give it some thought and be in touch if I think it makes sense.

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