From 1 April 2014 for corporation tax payers and 6 April for income tax payers, capital allowances, which allow for tax relief for fixtures in property, must be identified and documented at the point at which commercial properties are bought or sold, or they will be lost forever.
The Law Society has published guidance for solicitors outlining the issues involved. It recommends that solicitors should advise clients to consult with capital allowances specialists when it comes to commercial property transactions after April 2014 as, where a strict set of guidelines are not correctly followed, eligibility to the relief will be lost, not only for the new owner, but also for any future owners of the property. This should be done as soon as possible to avoid financial loss to the client (and potential accusations of negligence levelled at the solicitor), and for available allowances to be secured.
To put things in context, capital allowances specialists Catax Solutions (at the instructions of the Society) has concluded that out of approximately 98,000 commercial property transactions which took place from April 2012 to April 2013, 10,000 qualified for a capital allowances.