Many investors are unaware of the potential benefits of capital allowances.
Therefore they potentially lose out on some significant tax benefits. As one of the first ports of call for a client you, as a property professional are very well placed to inform your client about the benefits of capital allowances.
In our experience, the majority of clients miss out simply because they do not know that they are eligible to claim anything. This is because, in many cases, their accountant and other advisors will not raise the point. In addition, the value of the allowances on a property acquisition will normally need to be calculated by a specialist but they will have no way of knowing about the transaction unless someone introduces them to assist.
At Wandsworth Consulting we have many years of specialist capital allowances expertise at a number of Big 4 accountancy firms, specialist boutique tax firms and large surveying practices, so we are perfectly placed to look at all capital allowances projects. We would be very happy to become your preferred supplier of capital allowances services that you can recommend to your clients.
Why should you be interested in Capital Allowances?
When it comes to purchasing, selling or altering a commercial property, knowledge of capital allowances can make a significant difference to your client and their cash flow. This in turn has an impact on your agency fees in the short term but also can impact business reputation and offering in the long run.
”Wandsworth are standout advisors in this specialist area. Their advice greatly benefits our clients and further enhances our comprehensive range of services for building owners redeveloping their properties.Sean Cleaver(Corep)
We would recommend that clients take advice in the early stages of a transaction so that the full tax implications can be considered. Proper planning will drive the tax efficiency so the earlier the capital allowances issues are looked at the better the ability there is to create tax savings for the client.
We know there is a common misconception that the client’s accountant will be taking care of the tax implications, but if the contracts have not taken account of the new rules the ability to make any claim could be seriously compromised. In addition, the introduction of mandatory elections means this now needs to be covered in significantly more detail than before.
Key impacts of the new legislation
Increased due diligence
What is certain is that the changes will require sellers and purchasers of commercial property and their advisers, to undertake and an increased level of due diligence to ensure their entitlement to allowances is not unknowingly restricted.
Similarly, owners of commercial property will need to ensure systems are in place to be able to track fixtures on which a prior entitlement exists so future owners of those fixtures are not potentially denied allowances on them.
The new rules add yet another layer of complexity for both purchasers and sellers which could prove very costly if not fully understood and planned for.
Both parties should therefore take expert advice as early as possible to ensure that nothing is missed that could either delay a transaction or result in a purchaser looking to reduce the purchase price to reflect the reduced level of allowances available to them.
A purchaser who neglects to undertake the appropriate due diligence could discover post-completion they are not entitled to the level of Capital Allowances they had assumed they would obtain
A brief outline of each service
The full service: We work with you or with the client directly to identify all the property-related expenditure that has been incurred in the relevant financial periods, or that may be about to be incurred on an upcoming project. We review the entitlement to claim and go on to create a detailed analysis of the capital allowances treatment of all the expenditure and then support the analysis through to a settlement of the claim with HMRC.
The review service: Where you prepare the claim(s) for the client we can, if requested, use our property, surveying, legal and construction expertise to review your claim and the expenditure on which it is based, to ascertain whether we can enhance the claim further. Based on our past experience this can add anything from an additional 10% to 50% to the value of the claim.