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Replies to Queries - Care home allowances

21 April 2005
Issue: 4004 / Categories:

We are well aware that on building a new care home, capital allowances are available on certain elements of the cost, for example for any fixed plant, etc. However, it also appears to be possible for the owners of a care home to claim capital allowances in situations where they have only recently purchased the home, despite the home being built many years ago.

We are well aware that on building a new care home, capital allowances are available on certain elements of the cost, for example for any fixed plant, etc. However, it also appears to be possible for the owners of a care home to claim capital allowances in situations where they have only recently purchased the home, despite the home being built many years ago.
If this is the case, we would be grateful for some guidance on how the value of the part of the freehold property qualifying for capital allowances is arrived at, as there are often no proper records of costs available. We also wonder how the new owner will be able to find out whether or not capital allowances have been claimed on the building in the past, as it seems quite common for these properties to change hands several times.
Presumably, if a claim for capital allowances on the property is made, then on any subsequent sale of the property the price would need to be broken down to show the portion qualifying for capital allowances.
In this situation, could it be possible that there is a balancing allowance or a balancing charge on the capital allowances claim where the written down value of such allowances differs to the proportion of the sale price attributable to the part which qualifies for capital allowances.
Readers' observations would be gratefully received.
(Query T16,595) 

Issue: 4004 / Categories:
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