A common misconception among property owners and even some accountants is that capital allowances are only available on newly purchased or recently developed properties.

In reality, significant tax relief may still be available on older properties, even those acquired many years ago.

If you or your client owns a commercial property, it’s worth understanding when capital allowances can still be claimed and where opportunities are often missed.

The Short Answer: Yes, You Often Can

Capital allowances are not limited to new builds.

You may still be able to claim on:

• Properties purchased years ago
• Commercial properties bought from another business/investor who already owned it
• Buildings that have undergone refurbishment
• Properties where no formal capital allowances review has ever been undertaken

In many cases, we see substantial unclaimed allowances sitting within older properties.

Why Are Allowances Missed on Older Properties?

There are several reasons why claims are overlooked:

1. No specialist review at acquisition
   Most property transactions are completed without a detailed capital allowances analysis. Standard accounting or legal processes rarely identify the full value of qualifying assets.
2. Misunderstanding of what qualifies
   Fixtures within a property, such as electrical systems, heating, lifts, and sanitary ware can qualify. These are often embedded within the building and not separately identified.
3. Incorrect assumptions about “used” properties
   Many assume that if a property is second-hand i.e. bough from a business or investor and not the developer, the allowances are no longer available. This is not always the case.

Key Rules to Be Aware Of:

While claims are possible, there are important rules that determine eligibility:

1. Previous Ownership History Matters

If the previous owner claimed capital allowances, the ability to claim may depend on whether a Section 198 election was agreed during the sale.

Without this, allowances can sometimes be permanently lost.

2. Fixtures Rules Apply

Capital allowances on fixtures are subject to specific legislation introduced in 2014.

To claim:

• The seller must have “pooled” the expenditure
• The value must be agreed between buyer and seller (usually via a Section 198 election)

If these steps were not followed, the position becomes more complex, but not always impossible to resolve.

3. Timing Is Important

Although there is no strict deadline for amending capital allowances within a tax return, the longer the delay, the greater the risk of lost documentation or reduced claim potential.

What About Very Old Purchases?

Even if a property was acquired:

• 5 years ago
• 10 years ago
• Or longer

…it may still be worth reviewing.

We regularly see cases where:

• No claim was ever made
• Only partial allowances were identified
• Significant embedded fixtures were missed

A retrospective review can often unlock unexpected tax savings.

When Is a Claim More Likely to Be Successful?

You are more likely to benefit from a review if:

• The property is commercial (e.g. offices, retail, hotels, care homes)
• The purchase price was substantial
• Refurbishment or fit-out works were carried out
• No specialist capital allowances report was prepared at the time

A Practical Example

A business purchases a commercial property and treats the entire cost as non-qualifying building expenditure.

Years later, a capital allowances review identifies:

• Electrical systems
• Heating and air conditioning
• Internal fixtures and fittings

The result? A six-figure claim that has previously gone unrecognised.

Should You Review Older Properties?

In many cases, the answer is YES.

A review is particularly worthwhile where:

• The original acquisition lacked detailed tax analysis
• The property has changed hands multiple times
• The current owner is unsure whether allowances were ever claimed

Final Thoughts

Older properties should not be dismissed when it comes to capital allowances.

With the right analysis, they can represent a significant opportunity to recover missed tax relief, even years after acquisition.

How CPA Tax Can Help

At CPA Tax, we specialise in identifying and maximising capital allowances on commercial property, particularly where claims have been missed.

If you or your client owns an older property and are unsure whether allowances have been fully claimed, we can carry out a detailed review and provide clear, practical advice.

Let’s work together 

📩 Contact us today to learn more about capital allowances.