April 11th, 2018.

The availability of capital allowances is regularly overlooked by commercial property owners; be it those who own commercial property portfolios as investments, or those who own and occupy their own trading premises.

When a buyer purchases a property, the cost of the building can be separated from the fixed plant and machinery. This fixed plant and machinery qualifies for tax relief in the form of capital allowances.

However, in order to benefit from the tax relief on fixtures and fittings, one needs to agree a transfer value with the property seller in circumstances where the seller is entitled to and has claimed capital allowances on the fixtures.

It does seem a little bizarre that the rules apply to restrict your claim for what is essentially qualifying expenditure on qualifying plant to the amount that has been claimed by previous owners. Therefore any purchaser of second-hand property should make themselves aware of the rules, or have good and timely professional advice when making a commercial property purchase.

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