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Capital Allowances - update

The transitional rules relating to Capital Allowances (CA’s) will end from April 2014.

From April 2014 any commercial property transaction that fails to deal with CA’s correctly will lose relief - permanently.

The law requires the vendor and purchaser to agree the value of the CA’s pool in the property being sold and make an election for this amount. This election has to be submitted to HMRC within two years of the property completion.

Where the vendor and purchaser are unable to agree, the legislation gives either party the option to take the matter to the First Tier Tribunal for an independent ruling.

It is strongly recommended that the matter of available qualifying items is agreed prior to the exchange of contracts.  No election leaves a purchaser at risk of losing allowances or a vendor susceptible to an additional tax charge.

It is, therefore, becoming increasingly important to plan in advance for property transactions.



Date: 12th August, 2013
Author: Cathy Corns


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