Planning to build, refurbish, renovate or extend? Now is the time!
Capital allowances enable commercial property owners to obtain tax relief on capital expenditure.
This makes a property with capital allowances more valuable than an identical property without capital allowances.
Capital allowances are available when a commercial property is purchased, constructed, fitted out, refurbished, or extended.
Qualifying commercial property includes shops, offices, hotels, restaurants, care homes, pubs, factories, industrial units, warehouses and communal areas of student flats.
Why purchase or refurbish in 2020?
Companies can claim 100% tax relief in the year of purchase on the first £1,000,000 of qualifying expenditure by claiming the Annual Investment Allowance (AIA).
This £1,000,000 limit is only temporary, having previously been £200,000 a year, so 2020 is a good year for you to be purchasing and renovating a property!
What constitutes qualifying expenditure?
Qualifying expenditure includes the features and items installed within a commercial property which make it fit for the purpose of its trade. Qualifying items include carpets, bathrooms, kitchens, electrical works, security alarms, lifts, hot and cold water installations and all the building works and associated fees in connection with the building works.
Any more tips?
A final little YesTip is that it is also beneficial to incur expenditure just before, rather than just after, your accounting period end. You will then benefit from tax relief on the expenditure one year earlier.
If you are purchasing, refurbishing or building commercial property and would like to understand how to ensure you are getting maximum tax relief, please contact hello@yes.tax