Capital Allowances Claims on Commercial Property Expenditure

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We recently completed a capital allowances claim on a large industrial property which had been purchased in 2007. In talking to the owners it became clear they had previously spoken to a "tax adviser" who had told them there was a two year time limit on claiming capital allowances on "fixtures" in a commercial property. The only reason they decided to investigate this further was they were preparing to sell the property and their solicitor suggested the advice they had previously been given may be incorrect.

Is there a two year rule? 

We have often heard of professional advisers who have given different time limitations for claiming capital allowances and in our experience their advice is incorrect more times than it is correct. At the risk of over simplifying the situation for property purchased before April 2012 and the majority of properties purchased before April 2014 there is no time to investigate the entitlement to claim capital allowances on a commercial property.  

So where does the two year rule come from?

For property purchased after April 1st 2014 for Corporation Tax Payers and April 6th 2014 for Income Tax Payers there may well be a two year time limit from completion to claim capital allowances. This is more likely to be true where the previous owner was entitled to claim capital allowances but failed to do so. However there are many variables which can come into play and all may not be lost even if two years have elapsed. For example the previous owner may have purchased the property before April 2008 and was therefore not entitled to clam capital allowances for Intergral Features. This leaves the new owner able to make a claim, all be it on a restricted basis.

Our Advice

Not unsurprisingly our advice would be to consult with a capital allowances specialist (or advise your client to consult with a capital allowances specialist ) as early as possible within the commercial property purchase process. The client I mentioned at the beginning of this piece benefited from capital allowances of  circa £370,000 because they asked the right question before the opportunity to make a claim was lost to them. A capital allowances specialist can add value to either a buyer or a vendor if the timing is correct. 

John Plumridge



About plummy1

After failing at and early age to make a living by playing guitar, I started a career helping clients to save money and become more efficient. In 2009 I set up Curtis Plumstone Associates to concentrate on undertaking Capital Allowances Claims on Commercial Property. My business partner is a Deloittes trained expert in this field and my job is to keep him as fully employed as possible on projects large and small.   


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