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
Articles from this Author
Contact Business Service Partners
Choose from the drop down menu below to select a Partner to contact.
19 TAG Alliances Member Firms will be gathering in the Isle of Man this weekend for the 2018 UK and Ireland Regiona… twitter.com/i/web/status/1…
For the latest Mercer & Hole news, visit our LinkedIn page mercer-&-hole