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Capital allowances on rental property

Capital allowances on rental property

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I should know the answer to this but it's getting late and I can't think straight.

Client has presented me with a capital allowances report in respect of an industrial unit that he has owned and rented out since 1994. Report has identified expenditure on integral features and plant and machinery (by apportioning the original purchase price based on replacement cost. Am I correct in thinking that because the expenditure was incurred before 6 April 2012, capital allowances can still be claimed under the old rules i.e. the 2012 and 2014 changes do not apply? I assume that the rates will be 8% for the integral features and 18% for the plant and machinery i.e.no AIA due. Also, instead of claiming on the 2013/14 tax return (currently being prepared) can I amend the 2012/13 tax return instead?

Many thanks

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By BKD
06th Jan 2015 22:19

You can still claim allowances

But have a think about your point re integral features.

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By plummy1
07th Jan 2015 00:36

Integral Features??

Mrs Merton,

You cannot claim capital allowances under the integral features rules unless the expenditure was incurred after the legislation was introduced in April 2008. You would need to go back and question the capital allowances company used on this point. You will also need to make sure they haven't claimed for anything which they shouldn't have if the integral features rules do not apply.

Regards John.

 

 

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By mrs merton
08th Jan 2015 11:25

Integral features

Thanks guys.

The integral features comprise:

Electrical switchgear & distribution

General power and lighting

Sanitary & cold water installations

Would these have qualified as plant & machinery under the pre - integral features rules?

 

Thank you for your help

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Portia profile image
By Portia Nina Levin
08th Jan 2015 11:34

Probably not

The client appears to have been ripped of by a capital allowances cowboy.

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By BKD
08th Jan 2015 12:44

Not so fast

Electrical switchgear and distribution might fall within item 2 of List C.

General power and lighting  - almost certainly not.

Cold water installations - almost certainly not.

Sanitary ware - possibly within item 5 of List C.

 

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By Portia Nina Levin
08th Jan 2015 12:57

Er

"Electrical switchgear and distribution might fall within item 2 of List C."

Item 2 reads:

"Gas and sewerage systems provided mainly–
 (a) to meet the particular requirements of the qualifying activity, or
 (b) to serve particular plant or machinery used for the purposes of the qualifying activity."

EDIT: Ah! The FA 2008 changes removed electrical and cold water systems.

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