07.11.08

New rules for property investors

If you’ve invested in commercial property, new capital allowances rules could mean money back from the Inland Revenue.

New rules introduced in the 2007 budget have finally become law. They replace the first year capital gains allowance previously available only to small and medium enterprises (SME’s) with an Annual Investment Allowance that can be claimed by companies or private individuals alike. The allowance applies to the first £50,000 of expenditure on plant and machinery (excluding cars) incurred after 1 April 2008 for companies or 5 April 2008 for private individuals.

That means a high rate tax payer buying an office for, say, £250,000 could recoup £20,000 in the first year – that’s 8% of the purchase price!

Look back

These new rules supplement a system of tax relief for commercial property and holiday let owners that’s been around for many years, but is frequently misunderstood by investors and their accountants. That means valuable allowances are either unclaimed or missed completely.

If in doubt, it’s not too late to check, since there’s no time limit for claims. Irrespective of when you bought the property – as long as you still own it – check whether a claim was made for its purchase or for any subsequent alterations or extensions. And don’t be put off by phrases like “allowances all used up” or “no allowances available”, even if they’re enshrined in the contract. Get some expert advice and see if you can recoup some hard earned cash!

If you’d like to know more about capital allowances. Call us on 01905 622 180 or email info@aspirepersonalfinance.com.