BUSINESS owners can claim capital allowance on qualifying plants and machinery.
The capital allowance gives relief on the cost on qualifying expenditure immediately or over a period of time.
Capital allowance, however, is only available to integral features within the building such as lifts, air-conditioning system, electrical system etc.
Business owners can claim tax relief when they sell the property thereby reducing their capital gains.
HMRC is proposing changes to the tax treatment for integral features to the property and the actual structural asset.
Proposed changes for business owners that own non-residential properties
HRMC are proposing to introduce a new capital allowance for non-residential structures and building (SBA). These are as follows:
1. A tax relief at a flat rate of two per cent over a period of 50 years.
2. A tax relief will be available for commercial structures and building.
3. This relief will be available to structures and building owned by business within UK tax.
4. The relief that can be claimed is limited to the cost of physically constructing the structure or alterations
5. Relief will only be available to eligible expenditure that was incurred after 29 October 2018.
6. This relief can only be claimed when the building or structure is first used.
7. The cost of land and cost relating to planning permission is not eligible.
8. The business making the claim must have interest in the land where the structure or building is constructed.
9. Dwelling houses or houses that are used as a dwelling and commercial purpose do not qualify for this relief.
10. When this building is sold by the business, it will arise into balancing adjustment.
11. The business can continue to claim relief on any qualifying integral feature of the building.
12. When a business owner converts a building or structure so as to qualify for this relief, the expenditure will qualify for a separate 25-year relief over the next 50 years
To find out more contact Ronzl Accountants Ltd, 51 Billing Road, Northampton. Call 01604 965826 or see the website at www.ronzlaccountants.co.uk