Finding £5.5million in Capital Allowances

Purchase of Office Building

Instructed by a property company client to advise on the availability and level of capital allowances following their purchase of an office building for £21million.

Having ascertained that the seller was a non-taxpaying institution who was not eligible to claim capital allowances, and who acquired the property from the original developer, we were able to determine that there were no restrictions on the client’s entitlement to make a claim.

Following a detailed property inspection to identify the qualifying assets and to enable us to estimate a replacement cost for the building, we prepared a capital allowances claim as an apportionment of the purchase price.

The total level of capital allowances claimed amounted to in excess of £5.5million, being some 26% of the purchase price, and resulted in a tax saving in the first year of approximately £180,000 and over the first three years of ownership of some £475,000.