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The good, the bad and the ugly

08 April 2014 / Alun Oliver , Rupert Guppy
Issue: 4447 / Categories: Comment & Analysis , Business

Reviewing the new capital allowances rules for property transactions

KEY POINTS

  • Capital allowances will continue to be available on second-hand property.
  • Optimising capital allowances improves cash flow.
  • The fixed-value pooling and disposal value requirements.
  • Failure to comply with the new rules can mean that qualifying expenditure is nil.
  • Property owners and advisers should review investment properties held without claiming capital allowances.

The most significant changes to capital allowances since July 1996 were introduced from 1 April 2014.

Contrary to the views of some doom-mongers the good news is that taxpayers will continue to benefit from claiming capital allowances where they incur capital expenditure on an existing property.

CAA 2001 entitles a purchaser to claim tax relief in respect of the proportion of the expenditure that relates to eligible assets – known collectively as fixed “plant...

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