When commercial property is sold, some fixtures, fittings and equipment included in the sale could be eligible for Capital Allowance tax relief. It has been estimated that over £2 billion is lost by businesses who have not claimed this tax relief.
These items need to be registered with HM Customs and Revenues within two years of the property sale. It does not matter if the new owner is a business buying the property for their own use or a landlord that rents out the building.
If the property owner fails to register items for Capital Allowance they will not be able to claim tax relief.
It is best to claim for Capital Allowance items as soon as the sales has been completed. It does not matter what type of business is using the property, tax relief can be claimed.
Items that can count towards Capital Allowance include heating, lighting, plumbing sanitary ware, carpets and air conditioning. As long as these items were included in the sale price, they can be claimed for. The seller of the property needs to record a realistic cost for the capital items that are included in the sale, and this will be the cost that the buyer is said to have paid as part of the property purchase.
When creating a business plan for commercial property investments all costs and income must be taken into account, including the cost of commercial mortgage repayments and the tax relief on capital items.