Portal Tax Claims, one of the UK’s largest specialist capital allowance companies, is urging commercial property owners to claim their full capital allowance entitlement ahead of the 2012 Finance Bill, following the issuing of a consultation paper by HRMC, which proposes fundamental changes to the rules for capital allowances claims for fixtures. 

 

Portal Tax Claims will be engaging in the consultation process for the paper, but as the outcome is uncertain advises property owners to act swiftly. The consultation paper follows the announcement in the 2011 Budget that the Government would be consulting on a ‘mandatory pooling’ proposal. This proposal is aimed at preventing allowances from being given more than once on the cost of a fixture. 

 

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If the proposals in the consultation paper become legislation in the 2012 Finance Bill, Portal Tax Claims believes they will have a dramatic impact on many property investors. 

 

Key proposals include:

·        Buyer and seller will be required to agree a capital allowances transfer value and notify HMRC of all sales within one to two years. This is expected to replace the current s198 tax elections which do not currently have to be used and are only applicable once a seller has made a claim;

·        The possibility of an s198 tax election for £1 will be withdrawn and transfers will be made at tax written down value, reducing the ability to limit clawback;

·        All businesses will be required to pool expenditure on fixtures within a short period after acquisition (‘mandatory pooling’);

·        All businesses will be required to pool fixtures for all historical expenditure (‘mandatory pooling’).

 

HMRC is instigating the changes because it consider that the capital allowances history of acquired fixtures have not been satisfactorily checked by taxpayers to date. However, Portal Tax Claims fears that many business and commercial property owners will lose out financially with the new legislation.

 

Jeanette Edmiston, technical team leader at Portal Tax Claims, said: “We strongly urge commercial property investors not to delay in making their capital allowances claims. Whilst the outcome of the review is still not certain, the financial implications - should it go ahead in its current format -  could prevent claims, which often amount to tens of thousands of pounds.”

 

If you would like to find out more please call 0845 000 0450 or visit www.portaltaxclaims.com.