Husband and wife owners of two industrial units received an unexpected windfall of £130,000 by way of tax rebates and relief. It came as a surprise that they could have claimed a large chunk of this as far back as 2010 when the first property was purchased, but they had been unaware of their entitlement.
Rob Sowden of Bournemouth-based consultancy Business Cash Enabler reports: “It is often not understood that it may be possible that a large part of the purchase price may be deducted from profits in order to reduce tax liability.
The property owners referred to had purchased two industrial units but were not made aware through the conveyancing process that there could be inherent claimable relief in the original fixtures. Having established that these had not been claimed by a previous owner, a claim was possible by the couple as the current owners of these assets. The two properties were now owned 50/50 in joint names by husband and wife and as they were both higher rate (40%) tax payers, this resulted in a projected £130k tax relief being split equally between them and credited to their personal tax accounts. This enabled them each to receive immediate tax refunds for the previous two tax years and to claim the balance via an annual writing down allowance, which estimates to significantly reduce their tax bills for the following 4 years.
Regardless of when a commercial property was purchased, the current freeholder may be eligible. There are also circumstances whereby a leaseholder could be eligible, notably when a capital sum is paid for a long leasehold interest. In either case, there may be unclaimed relief from the cost of a refit, refurbishment or extension. Relief could be available for any commercial property – care homes, car showrooms, offices, warehouses, industrial units, factories, hotels, pubs, restaurants, retail outlets, veterinary/dental/health surgeries, furnished holiday lets, caravan parks, etc. Relief would be attributed to whoever owns the property which could be a tax paying entity or individuals, but it wouldn’t provide immediate benefit if the property is held in a tax shelter such as a pension, or is owned by a non-tax paying entity or individuals.
Identification of all qualifying items eligible for tax relief is a specialist area. It is not a part of compliance accounting and therefore often gets missed. Changed legislation affects more recent commercial property transactions but there are steps buyers or sellers can take to protect their respective interests. Business Cash Enabler works with a specialist provider which checks entitlement and surveys premises to accurately calculate potential tax savings and produce an HMRC compliant report. If there is no claim there is no fee, so it’s a sure way to make sure nothing is missed.”
Business Cash Enabler can arrange a free eligibility check for any commercial property owners.
For more information email: Enquiries@businesscashenabler.co.uk
or call Rob Sowden on 07732 627085