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Capital Allowance Overview
Capital Allowances are a form of tax depreciation that provide Tax Relief for property owners, occupiers and investors.
Since 2011, when industrial buildings allowances were abolished, there has been no tax relief available for expenditure incurred on the raw building or structural components of a building, such as the floor, roof, walls and so on.
Instead Capital Allowances are available (by reference to set percentages) for expenditure on different types of asset classes and, in terms of commercial properties, this includes expenditure incurred on items such as:
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Long-life assets |
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Energy-efficient and water-saving assets |
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Further legislation which came into force in April 2014 has an impact on claims made by a purchaser of a second hand commercial property purchased after that date.
Commonly Capital Allowances are available when a commercial property is purchased for use in the course of a trade, or property investment business, or when commercial new-build, extension or fitting out/refurbishment works are undertaken.
Good examples of such properties include:
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factories |
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industrial units |
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leisure facilities |
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filling stations/garages |
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showrooms |
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workshops |
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warehouses |
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distribution centres |
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haulage yards |
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transport facilities |
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multiple office complexes |
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retail shops |
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nursing / residential homes |
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hotels/B&Bs |
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clubs / pubs / restaurants |
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golf courses / sporting venues |
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dental surgeries |
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cold storage facilities |
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staff welfare facilities |
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