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Embedded Capital Allowances refer to tax deductions that can be claimed by a purchaser of a property or business, for assets that are already in place within the property or business at the time of purchase. These assets are deemed to be “embedded” within the property or business, therefore their value is already included in the purchase price.
The purchaser can claim tax relief on the value of these assets, which can reduce the overall tax liability of the purchaser. This can be a significant benefit, particularly for purchasers of commercial properties or businesses, as the value of the embedded assets can be substantial.
Examples of assets that may qualify for capital allowances include, heating and air conditioning systems, lighting fixtures, and machinery. It is important to note that in order to claim capital allowances, a proper assessment must be carried out, which can involve an inspection of the property or business, and may require qualified professional services.
Over 75% of commercial property owners are yet to make an Embedded Capital Allowances claim and miss out on their capital allowance refunds which they are entitled. Are you one of them?
As long as you own UK commercial property and pay tax in the UK, then you can claim. The following are examples of the type of commercial property that will be eligible,
The Capital Allowances Act 2001 provides for tax relief on expenditure that are considered Fixtures and Fittings of the commercial building. These may include,
The Counting King team of tax and valuation experts will carry out thorough due diligence on property transactions. We are experts in valuing allowances on both current and historic acquisitions, making sure you get the full benefit. The team of experienced Chartered Tax Advisers can optimise and correctly categorise a claimant’s Capital Allowances.
This is a short meeting either by phone or in person, to confirm if you are eligible for Embedded Capital Allowances.
This is to confirm our T&Cs, NDA, and Data Protection Compliance, and is a simple form signed electronically.
This is where you will sit down with a specialist tax analyst to determine if your company qualifies for Embedded Capital Allowances, and explain the administration process that Counting King will conduct on your behalf (a site survey may be necessary).
We request copies of certain financial documentation such as your accounts, tax computations, and invoices relating to works carried out (if necessary) to calculate what benefit you will receive.
This is where we send everything to you for approval and make sure you are happy with the content included, which will be sent to HMRC.
This is where your claim and all of the supporting evidence we have produced is submitted to HMRC for processing.
Once HMRC has processed your claim you will receive the benefit as discussed with your Tax Analyst at Counting King.
Find Out How Much You Can Claim With Our FREE Embedded Capital Allowances Calculator. You can even get the calculation emailed to you for future use.
If the property was built or purchased before April 2014, there is no time limit on accepted claims. However, after April 2014, if the previous owner had not made a claim for Embedded Capital allowances, then all rights to claim tax relief against future ‘Fixtures and Fittings’ may not be claimed by any future buyer.
The cost of the survey will be part of Counting King’s fees, regardless of the number of properties.
Floor plans and any Building reports would be useful.
S41 Taxation of Chargeable Gains Act 1992 allows for Capital Allowance claims and that these do not affect the cost of an asset for capital gains purposes.
Yes, as there are several methods, we can use to confirm proof of expenditure.
Contact us today to learn more about our embedded capital allowances and how we can help your business grow.