High Street Bank
A high street bank based in London was acquired by an investor.
Typical plant included: Central heating systems, Vinyl flooring, Built-in strong rooms, Work tops, Intercom stations, Shelving and Security systems.
The acquisition cost was £1,289,600 and total claimable allowances were £392,542. The property was held in a limited company paying corporation tax which resulted in a total tax saving of £78,508. With the Annual Investment Allowance (AIA) set at the time to £250,000, the full tax saving was realised in the first year. We worked directly with the client’s accountant to assist with the submission of the report to HMRC. When the client sold the property a few years later, we provided the wording to the client’s conveyancer to ensure the benefit was retained in full by the client.
Total saving of £78,508
Medical Practice
A multi-partner medical practice undertook extension and refurbishment works in excess of £1.6m to their existing building.
The contract was let on a design and build basis with very little breakdown of the tender cost. Typical claimable items included: Doctor call system, Reception desk, Passenger lift, Induction loop, Heating system and Sanitary appliances.
By undertaking a deep analysis of the property, we identified and separated qualifying expenditure between the originally purchased structure and the extension. Taking into consideration ownership structure and NHS grant funding, we were able to deliver a tax saving of over £320,000 to the partners. Our capital expenditure analysis enabled the client to purchase items which qualified for Enhanced Capital Allowances thus increasing the value of the claim.
Large Portfolio
Our client is a sophisticated property investor with a portfolio in excess of 100 commercial buildings spread across England and Scotland.
The portfolio is housed in multiple companies owned by the client with varying tax and accounting structures in place. Properties included multi-building office complexes, retail units, town centre shop parades, cafes and industrial buildings.
In the first instance, we undertook a review of the client’s financial structure in order to ensure that there was a valid claim for, and a significant benefit to be derived from, capital allowances. The due diligence process on each property then started, requiring us to access a number of
private commercial property databases as well as collate all relevant legal information.
We were able to provide the client with an accurate assessment of the estimated value of the claim and the dates on which these savings would be realised.
By making arrangements directly with the tenants, we undertook a physical inspection of every single property – as far north as Fort William and as far south as Bournemouth. Having completed these capital allowances surveys, we started the detailed analysis of incurred expenditure and cost data.
Our final reports were structured in a way that was suitable for HMRC submission. After explaining the report to the client’s in-house accountant, we provided them with the correct unclaimed allowances figures to be included in the next tax return and were on hand to answer any questions.
As a result of our exercise, we were able to identify unclaimed allowances in excess of £30m for the client and agreed these with HMRC without concession.
Hotel and Pubs
A hotelier held a property portfolio consisting of 7 hotels and 5 pubs with a total purchase consideration of £26.2m.
He had undertaken considerable refurbishments on one of the hotels which included replacement of furniture, fixtures and equipment alongside completely redecorating the reception area. The total refurbishment expenditure surmounted to £2.3m.
Typical claimable items included lifts, cold water and electrical systems, air conditioning and ventilation systems. Our expertise in this area meant we were able to secure relief on specific trade related plant, such as swimming pools and acoustic insulations, maximising the savings for our client.
In total, the qualifying expenditure resulted in claimable capital allowances in the region of £7.4m allowing our client to benefit from savings in excess of £1.4m. A number of the properties had been purchased several years prior to undertaking the exercise, which allowed their accountant to successfully secure a tax rebate of £186,000 from HMRC.
Supermarket
A high street Supermarket was acquired by an investor in December 2017 for £1,490,000. The property was semi-commercial and comprised of a retail Co-Op store on the ground floor with six flats above.
Typical plant included: Central heating systems, Vinyl flooring, Built-in store rooms, shelving and security systems. The total claimable allowances were originally proposed between £130,000 – £145,000 translating to a tax saving of between £24,700 and £27,550 as the property was held in a limited company. The window for benefitting from the Annual Investment Allowance (AIA) of £200,000 was open and in addition, due to the highly specialised security systems installed, the actual allowances identified were £288,840 precipitating a tax saving of £54,800 which was double than the maximum originally forecast. This case was unusual as the client had installed a very high quality security system which was only identified during the surveying process.