Frequently Asked Questions

Q. Why does my accountant say I can’t do this?

We are more than happy to explain the service and relevant UK Property Capital Allowances legislation to clients’ accountants (CAA2001).  We hope to provide an excellent service and obtain future referrals.  Usually it’s a case of crossed wires and can mainly be resolved at the outset.  There are always client-specific factors which we will need to understand

Q. What is the fee ?

We provide a bespoke fee depending on the value and complexity of the case.  We can provide our Fee Match Guarantee because we charge a survey fee on instruction, which is clearly appropriate in this situation.  Competitors who don’t do this aim to recover this cost and more with higher percentage fees.

Q. Can’t I leave it a few months – it’s so complicated ?

Yes, of course, but legislation changes (most recently 17 July 2012), tax deadlines come and go, allowances are being reduced, and you may lose out on first year allowances.

Q. What is Plant and Machinery?

It does sound slightly ridiculous in the context of property.  The relevant legislation doesn’t dwell or even attempt to define Plant and Machinery, but rather it gives three lists: List A which relates to “Assets treated as Buildings” (and even if this was P&M is non-qualifying), List B which relates to “Excluded structures and other assets” (again to be excluded) and then List C “Expenditure unaffected by” [Lists A or B].   List C is a very long list of potentially qualifying items, including the provision of fixed zoo cages!

Q. Do I have a qualifying business?

Yes, provided your business carries out one of the following:

  • Trades and professions
  • ‘Ordinary’ UK property businesses
  • ‘Ordinary’ overseas property businesses
  • Furnished holiday letting in the UK
  • Furnished holiday letting elsewhere in the European Economic Area In the case of the first item, any worldwide property owned in the course of a trade or profession would qualify.  We particularly enjoy these surveys although please note that additional reasonable travel expenses will be incurred.

Q. What is the AIA or Annual Investment Allowance?

An annual investment allowance (AIA) is given in the year that the expenditure is incurred on plant and machinery.  A writing down allowance (WDA) can also be claimed in the same year.    In the 2010-11 and 2011-12 tax years, the maximum cap on the AIA is £100,000.  This is reducing to £25,000 from 2012-13.

Q. When a property is sold, will the Capital Allowances claim prejudice the Capital Gains Tax calculation?

Retaining capital allowances on the sale of your property does not affect your capital gains tax position, provided the property is sold without loss.  This is essentially because fixtures in the CGT legislation (TCGA 1992) – unlike CAA2001 Capital Allowances legislation – are not treated as wasting assets.  This is because whilst P&M would on their own be wasting assets (and hence would impact CGT) when they are part of a building the same act states that freehold land shall not be a wasting asset including any buildings on it!


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