What are Property Capital Allowances and How Can I Make a Claim?
If a commercial property is for sale and contains several assets within, then the company or the person that buys, improves or leases it can be eligible for capital allowances on the asset within the property. It is almost impossible for an operational commercial property not to have some claims to make.
If you want to be eligible to claim property capital allowances then check out the assets of the commercial property that you have just bought that has an expected life of more than two years, and such assets should not be part of the structure but are contained in or used for the property. When there are tools or assets used for the business being done within the structural framework, then these are the assets referred to and not the structure housing them. So, for example you bought a factory that contains a refrigeration system but if you will not use that facility, then you cannot make a claim against it but you are eligible for capital allowance if you continue using it for your current operations.
Vehicles, large tools, machinery, furniture, furnishings, computers and telecommunications equipment, electrical goods, safety and security equipment, software with working life of more than 2 years, bathroom equipment, swimming pools, storage equipment and more are the assets that you can use and claim allowances for. Inefficient cars, power supply systems, water supply systems, lifts, escalators, and people movers fall under a second category of assets that are eligible for capital allowances.
Most of the assets in the second category are those that are an integral part of the property excluding the inefficient cars.
If you have already seen the assets that are eligible for capital allowances, what do you need to do next? You first have to quantify or give the total value of all the assets that are eligible for capital allowance and they may be claimed back at the writing down allowance of 20%. What this means is that 20% of the remaining allowance can be claimed every year. However, for assets in the second category, the writing down allowance is only 10% which is slightly different than the other category. It takes longer to claim the whole allowance for assets in the second category.
So, in summary, if you buy a commercial property with usable assets in them, then you can claim capital allowances against them and this is something that a lot of people do not know about which is a good way to reclaim your money. If you are having difficulty in identifying and quantifying assets included in the property that you have just bought, then hiring a qualified surveyor will make it possible to identify and quantify assets that are eligible for claims. The help of a good accountant can be useful in reclaiming your money from the treasury.
If you are thinking of buying a commercial property, then you can be eligible for property capital allowances.