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If capital allowances on a building were unclaimed, can the purchaser claim?
Company A arranged the construction of a commercial property in 2006 using a bank loan. That property was the company’s only asset and was leased to a trading company Company B which is associated to Company A by common ownership but not grouped with it.
The bank foreclosed the loan and so with the bank’s agreement Company B acquired the property from Company A at a much-reduced current market value. This left Company A insolvent because the balance of the loan was outstanding. A liquidator was duly appointed.
Company A had never claimed capital allowances on the fixtures within the building. And accounts and a corporation tax computation were not prepared for the final accounting period up to the date of Company A going into liquidation due to its financial difficulties. The company had been loss-making and realised a significant capital loss on the property...
