Embedded Capital Allowances
Capital allowances are a type of tax relief that let you deduct some or all of the value of an item from your profits before you pay tax.
Spend on commercial property attracts a very small allowance rate, 3% per annum. However, all commercial properties contain hidden or embedded items (fixtures and features) that should be classified under general or special rate pool – the difficulty being, that as these items are hidden within the fabric of the property and the information regarding them is not broken down in a bill of quantities, they are usually missed.
At Momentum, we’re committed to helping you claim the value of these hidden capital allowances, ensuring that you gain the full entitlement of the benefit that is available to you.
Our Experienced Chartered Quantity Surveyors will review the available information, identify where you are missing out on additional allowances, complete a full survey and work with our Experienced Tax Experts to prepare a detailed RICS report and allocation analysis that your accountant can utilise when filing your annual accounts.
What are the Hidden Capital Allowances in Property
Capital Allowances are a tax relief for investment in capital items, typically these fall into Plant & Machinery, Special Rate Allowances or Vehicles etc. The property pool attracts little or no tax relief, however, hidden within the fabric of a building can be significant costs associated with more valuable allowance pools that your accountant is unlikely to be aware of due to a lack of available details - uncovering these can be highly valuable.
Typical levels of sector Capital Allowances*
| Property Purchases | New Build or Refurbishments | |
|---|---|---|
| Industrial Buildings | 15% - 25% | 15% - 35% |
| Office Buildings | 25% - 35% | 40% - 75% |
| Restaurants / Bars / Hotels | 35% - 45% | 50% - 85% |
| Care Homes, Surgeries / Clinics | 30% - 45% | 50% - 85% |
| Petrol Service Stations | 25% - 40% | 50% - 85% |
| Supermarkets / Retail Units | 30% - 45% | 50% - 85% |
* General CA Range (after adjustment for site value) as a % of Capital Spend
Your business may be missing out on valuable tax relief
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Call 028 9140 4030
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