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Optimising clients’ capital allowances claims on second-hand property transactions
KEY POINTS
- Capital allowances are complicated by the lack of a definitive list of qualifying expenditure.
- The new fixtures rules are now a year old but misconceptions remain.
- Best practice points to ensuring that expenditure is eligible for relief.
- For property refurbishment construction or extension consider whether expenditure could qualify for enhanced capital allowances.
- Accurate record-keeping and analysis of expenditure is very important
Businesses incurring capital expenditure will typically depreciate the cost of the asset over its expected life and this deduction in the profit and loss account will reduce accounting profits. However it is a well-established general principle that no tax deduction is allowable for expenses of a capital nature (ITTOIA 2005 s 33 and CTA 2009 s 53); instead ...
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