Who is eligible for capital allowances?

Who is eligible to claim capital allowances?

First and foremost the landlords must be a UK taxpayer/tax paying entity (i.e. a limited company). Properties held in trust or by a charity are not eligible to claim as they pay a limited amount of tax. Additionally, capital allowances can only be claimed once in the history of a building, precluding anyone who was issued with an s198/s199 election from claiming.

What if I was issued with an s198/s199 election?

The Finance Acts of 2012/2014 made it mandatory for the buyer and seller of a commercial property to allocate who would claim the allowances. However, even if you are issued with an election at the time of sale, there are some exceptions to this rule that may still allow you to claim. Where the seller purchased the property before 2008, the buyer may still be eligible for a restricted claim on cold water and electrical systems. Additionally, you will be able to claim on any refurbishments works you do to a property. For example, if you purchase a warehouse that had already claimed allowances and turned it into retail units, you would be able to claim on the expenditure incurred in re-developing the property.

The types of properties eligible to claim

Properties eligible to claim include fully commercial, semi-commercial and HMO properties. Some examples are, hotels, office buildings, shops with flats above, serviced accommodation, and storage facilities. Furnished holiday lets located abroad but pay UK tax are eligible to claim on a fully commercial basis, as long as they are let out for at least 105 days of the year, and available to rent for 210 days of the year. They must be used and let for tourists and not rented out to family and friends.

Get in touch with us today to see if you are eligible to claim


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