Owner Occupier

Lifecycle

Businesses who own their premises are entitled to claim capital allowances on elements of the capital expenditure incurred on buying the premises or when extending them or fitting them out for their trade.  This can include office, industrial or retail premises, doctor’s surgeries, nursing homes, health clubs, dentist practices etc. Capital allowances should also be considered on sale to ensure the tax relief benefit is retained.

Outlined below are the issues that need to be considered at each stage of the building’s lifecycle to make sure the benefits from the tax relief are fully realised.

BUY

+ Pre-Acquisition Advice: Second Hand Properties

Pre-Acquisition Advice: Second Hand Properties

The Issue: Capital Allowances can play a key part in the decision to invest in property.  From April 2014 the purchaser’s entitlement to capital allowances is dependant almost entirely on the actions of the seller.  Failure to enforce an obligation on the seller to provide the necessary information is likely to result in no claim for the purchaser. Non-tax payers also need to be aware that they can preserve the allowances for future owners.

How we Help:

  • We confirm the entitlement to claim capital allowances.
  • We liaise with your legal team to make sure the pre-contract enquiries ask the right questions.
  • We advise what clauses need to be incorporated into the sale agreement to protect your interests.
  • We confirm the scope and estimated value of your capital allowances claim.

Benefit to the Client:

  • Empowered: provides you with a stronger negotiating position.
  • Reassured: that the maximum amount of allowances can be claimed and preserved.
  • Protected: the contractual obligations of the seller properly recorded.

Why use TFI Group?

+ Pre-Acquisition Advice: New Properties

Pre-Acquisition Advice: New Properties

The Issue: The purchase of a brand new building presents the best opportunity to claim capital allowances as no one will previously have become entitled to claim the allowances.  However, this means the first owner needs to build up the capital allowances value using all available design and specification details and by carrying out an apportionment of the purchase price in accordance with s.562 of the Capital Allowances Act.    

How we Help:

  • We confirm that you have acquired the correct interest in land to claim the allowances.
  • We confirm what information is ideally required from the developer to support your claim.
  • We confirm the scope and estimated value of your capital allowances claim.

Benefit to the Client:

  • Empowered: provides you with a stronger negotiating position.
  • Reassured: that the maximum amount of allowances can be claimed.
  • Protected: the contractual obligations of the seller properly recorded.

Why use TFI Group?

+ Entitlement Reports

Entitlement Reports

The Issue: On more complex projects involving multi-stakeholders and legal entities it can sometimes become unclear who has entitlement to claim any available tax incentives. 

How we Help:

  • We review the structure and confirm where entitlement sits.
  • We provide an estimated value of the relief.

Benefit to the Client:

  • Reassured: Allows you to confidently factor the benefit of the incentives into the investment decision.
  • Protected: Allows corrective action to be taken if entitlement threatened.

Why use TFI Group?

+ Preparing Claims: Second Hand Properties

Acquisition Of Second Hand Property 1st April 12 – 30th March 14.

The Issue:  Where a previous Plant & Machinery Allowances (PMA) claim has been made, the buyer generally has two years to either agree a disposal value with the seller, get a tribunal to determine a disposal value or, where the seller was not entitled to claim, obtain written statements from them setting out the disposal value inherited from their vendor.  This leaves only a narrow window to prepare the claim or the allowances will be lost for good.

How we Help:

  • We review the terms of the sale and purchase agreement and answers to pre-contract enquiries.
  • We advise the potential scope of the PMA claim and any time limits that apply.
  • We work with the seller as necessary to determine an appropriate disposal value.
  • We prepare an enquiry for a Tribunal determination of the disposal value where appropriate.
  • We value any PMA that is unrestricted via an apportionment of the purchase price.
  • We prepare a s.198 Election to document the agreed PMA disposal value.

Benefit to the Client:

  • Reassured: The full entitlement to capital allowances identified and valued.
  • Improved cash flow: Higher post tax returns.

Acquisition Of Second Hand Property Pre- 1st April 2012 (5th April For Income Tax Payers)

The Issue:  A purchaser may be entitled to claim Plant & Machinery Allowances (PMA) on the portion of their purchase price that relates to qualifying PMA assets forming part of the building.  However, they must first confirm whether any previous claims have been made by any previous owner since 24th July 1996 that could restrict their ability to claim.

How we Help:

  • We review the capital allowances claim history.
  • We advise you of any restrictions that apply resulting from previous PMA claims.
  • We value any PMA that is unrestricted via an apportionment of the purchase price.
  • We separate the PMA assets into their pools so they are claimed at the correct rate.

Benefit to the Client:

  • Reassured: The full entitlement to capital allowances identified and valued.
  • Improved cash flow: Higher post tax returns.

Acquisition Of Second Hand Property Post April 14

The Issue:  Where the seller was previously entitled to claim Plant & Machinery Allowances (PMAs), irrespective of whether they did, then the buyer generally has two years to get the seller to prepare a claim (“pooling requirement”) and agree a disposal value with them. Failure to do so will result in the PMAs being lost for good. 

How we Help:

  • We review the terms of the sale and purchase agreement and answers to pre-contract enquiries.
  • We work with the seller as necessary to confirm the amount and nature of pooled PMAs.
  • We advise the potential scope of the PMAs claim and any time limits that apply.
  • We negotiate the PMA disposal value with the seller and prepare the s.198 Election to document the agreed value.
  • We value any PMAs that are unrestricted via an apportionment of the purchase price.

Benefit to the Client:

  • Reassured: The full entitlement to capital allowances identified and valued.
  • Improved cash flow: Higher post tax returns.

Why use TFI Group?

+ Preparing Claims: New Properties

Preparing Claims: New Properties

The Issue: Capital expenditure incurred on building or refurbishing property or fitting out premises under a lease is likely to attract significant amounts of tax relief but requires both a knowledge of tax legislation and building costs to ensure all allowable amounts are identified.

How we Help:

  • We review the project details and confirm the different incentives that could apply.
  • We engage with the design team to fully understand the project.
  • We review all relevant technical, design and commercial data.
  • We dissect and certify the qualifying project costs and allocate to the relevant pool.
  • We ensure the claim is fully reconciled to supplier’s final accounts and the project’s total spend.

Benefit to the Client:

  • Reassured: A robust and fully substantiated claim capable of withstanding any enquiry from HMRC.
  • Improved cash flow: A reduction in the amount of tax paid.
  • Cash from losses: tax credits available on expenditure incurred on remediation and on qualifying environmental plant and machinery.

Why use TFI Group?

DEVELOP

+ Pre-planning

Pre-planning

The Issue: Often claims are made after the expenditure is incurred meaning any opportunities for designing and procuring in a more tax efficient way are lost resulting in reduced claims. This is particularly relevant for projects that involve high levels of mechanical and electrical installations and fit out expenditure that is heavily related to the occupiers trade.

How we Help:

  • We guide the design team through the eligibility criteria to claim the various types of allowances.
  • We review the project with the design team to highlight the areas where allowances can be enhanced.
  • We advise the design team on specification, design and contractor procurement matters to ensure all the relevant information is available to prepare the claim.

Benefit to the Client:

  • Connected: tax teams and design teams aligned towards a common goal.
  • Protected: A suite of project documents that fully support the claim thereby making the claims more robust in the event of an enquiry from HMRC.
  • Improved cash flow: A project that realises the full tax relief potential.

Why use TFI Group?

+ Preparing Claims: New Build & Fit Out

Preparing Claims: New Build & Fit Out

The Issue: Capital expenditure incurred on constructing and fitting out a property is likely to attract significant amounts of tax relief but requires both a knowledge of tax legislation and building costs to ensure all allowable amounts are identified.

How we Help:

  • We review the project details and confirm the different incentives that could apply.
  • We engage with the design team to fully understand the project.
  • We review all relevant technical, design and commercial data.
  • We dissect and certify the qualifying project costs and allocate to the relevant pool.
  • We ensure the claim is fully reconciled to supplier’s final accounts and the project’s total spend.

Benefits to the Client:

  • Reassured: A robust and fully substantiated claim capable of withstanding any enquiry from HMRC.
  • Improved cash flow: A reduction in the amount of tax paid.
  • Cash from losses: tax credits available on expenditure incurred on remediation and on qualifying environmental plant and machinery.

Why use TFI Group?

REFURBISH

+ Pre-plannning

Pre-plannning

The Issue: Often claims are made after the expenditure is incurred meaning any opportunities for designing and procuring in a more tax efficient way are lost resulting in reduced claims. This is particularly relevant for projects that involve high levels of mechanical and electrical installations and fit out expenditure that is heavily related to the occupiers trade.

How we Help:

  • We guide the design team through the eligibility criteria to claim the various types of allowances.
  • We review the project with the design team to highlight the areas where allowances can be enhanced.
  • We advise the design team on specification, design and contractor procurement matters to ensure all the relevant information is available to prepare the claim.

Benefit to the Client:

  • Connected: tax teams and design teams aligned towards a common goal.
  • Protected: A suite of project documents that fully support the claim thereby making the claims more robust in the event of an enquiry from HMRC.
  • Improved cash flow: A project that realises the full tax relief potential.

Why use TFI Group?

+ Preparing Claims: Refurbishment & Fit Out

Preparing Claims: Refurbishment & Fit Out

The Issue: Capital expenditure incurred on refurbishing or fitting out a property is likely to attract significant amounts of tax relief but requires both a knowledge of tax legislation and building costs to ensure all allowable amounts are identified.

How we Help:

  • We review the project details and confirm the different incentives that could apply.
  • We engage with the design team to fully understand the project.
  • We review all relevant technical, design and commercial data.
  • We dissect and certify the qualifying project costs and allocate to the relevant pool.
  • We ensure the claim is fully reconciled to supplier’s final accounts and the project’s total spend.

Benefit to the Client:

  • Reassured: A robust and fully substantiated claim capable of withstanding any enquiry from HMRC.
  • Improved cash flow: A reduction in the amount of tax paid
  • Cash from losses: tax credits available on expenditure incurred on remediation and on qualifying environmental plant and machinery.

Why use TFI Group?

+ Demolition / Refurbishment Audits

Demolition / Refurbishment Audits

The Issue:  The demolition of assets upon which capital allowances have been claimed is a disposal event for the purposes of assessing any future balancing allowances or balancing charges.  Failure to properly record demolished assets could expose the business to unwanted balancing charges on disposal.  Furthermore, the demolition costs themselves will also attract capital allowances.

How we Help:

  • We isolate the plant and machinery demolition costs.
  • We schedule out assets removed as part of the demolition works.
  • We calculate the disposal values and make sure the necessary adjustments are made in the Capital Allowances Pools.

Benefit to the Client:

  • Protected: against any unwanted balancing charges.
  • Improved cash position: more tax relief retained.

Why use TFI Group?

REDEVELOP

+ Pre-planning

Pre-plannning

The Issue: Often claims are made after the expenditure is incurred meaning any opportunities for designing and procuring in a more tax efficient way are lost resulting in reduced claims. This is particularly relevant for projects that involve high levels of mechanical and electrical installations and fit out expenditure that is heavily related to the occupiers trade.

How we Help:

  • We guide the design team through the eligibility criteria to claim the various types of allowances.
  • We review the project with the design team to highlight the areas where allowances can be enhanced.
  • We advise the design team on specification, design and contractor procurement matters to ensure all the relevant information is available to prepare the claim.

Benefit to the Client:

  • Connected: tax teams and design teams aligned towards a common goal.
  • Protected: A suite of project documents that fully support the claim thereby making the claims more robust in the event of an enquiry from HMRC.
  • Improved cash flow: A project that realises the full tax relief potential.

Why use TFI Group?

+ Preparing Claims: New Build & Fit Out

Preparing Claims: New Build & Fit Out

The Issue: Capital expenditure incurred on building or refurbishing property or fitting out premises under a lease is likely to attract significant amounts of tax relief but requires both a knowledge of tax legislation and building costs to ensure all allowable amounts are identified.

How we Help:

  • We review the project details and confirm the different incentives that could apply.
  • We engage with the design team to fully understand the project.
  • We review all relevant technical, design and commercial data.
  • We dissect and certify the qualifying project costs and allocate to the relevant pool.
  • We ensure the claim is fully reconciled to supplier’s final accounts and the project’s total spend.

Benefit to the Client:

  • Reassured: A robust and fully substantiated claim capable of withstanding any enquiry from HMRC.
  • Improved cash flow: A reduction in the amount of tax paid.
  • Cash from losses: tax credits available on expenditure incurred on remediation and on qualifying environmental plant and machinery.

Why use TFI Group?

+ Demolition / Refurbishment Audits

Demolition / Refurbishment Audits

The Issue:  The demolition of assets upon which capital allowances have been claimed is a disposal event for the purposes of assessing any future balancing allowances or balancing charges.  Failure to properly record demolished assets could expose the business to unwanted balancing charges on disposal.  Furthermore, the demolition costs themselves will also attract capital allowances.

How we Help:

  • We isolate the plant and machinery demolition costs.
  • We schedule out assets removed as part of the demolition works.
  • We calculate the disposal values and make sure the necessary adjustments are made in the Capital Allowances Pools.

Benefit to the Client:

  • Protected: against any unwanted balancing charges.
  • Improved cash position: more tax relief retained.

Why use TFI Group?

SELL

+ Pre-disposal Advice: Second Hand Properties

Pre-disposal Advice: Second Hand Properties

The Issue: The seller of a building who has an entitlement to claim capital allowances must account for a plant and machinery disposal value when the building is sold irrespective of whether they have claimed any allowances. Failure to secure an agreed value with the purchaser can leave the seller exposed to suffering a full disposal value and having to repay the allowances enjoyed during their period of ownership. 

How we Help:

  • We review the capital allowances claim history and advise on disposal strategy.
  • Where appropriate we prepare a claim to enable the seller to declare their disposal value.
  • We prepare answers to pre-contract enquiries (Enquiry 32 CPSEs).
  • We prepare all required written notices where the seller is not entitled to claim allowances.

Benefit to the Client:

  • Added Value: Increased value and attractiveness of the investment.
  • Reassured: Removes the possibility of delay in the sale resulting from incomplete capital allowances information.
  • Empowered: A stronger negotiating position.

Why use TFI Group?

+ Sales Aids

Sales Aids

The IssueAvailability of Capital Allowances can significantly improve the attractiveness of a property investment but sellers still fail to fully promote the tax benefits to potential purchasers especially in instances where the seller has no interest in the tax relief themselves or are offering a full disposal value to a purchaser.

How we Help:

  • We fundamentally convert project information into valuable tax relief.
  • We review the project details and confirm the different incentives that could apply.
  • We engage with the design team to fully understand the project.
  • We review all relevant technical, design and commercial data.
  • We dissect and certify the qualifying project costs and allocate to the relevant pool.
  • We prepare any elections required by HMRC.
  • We ensure the claim is fully reconciled to supplier’s final accounts and the project’s total spend.

Benefit to the Client:

  • Reassured: A robust and fully substantiated claim capable of withstanding any enquiry from HMRC.
  • Improved cash flow: A reduction in the amount of tax paid.
  • Cash from losses: tax credits available on expenditure incurred on remediation and on qualifying environmental plant and machinery.

Why use TFI Group?

CORPORATE SERVICES

+ Capital Allowances Pool Management

Capital Allowances Pool Management

The Issue: The Capital Allowances legislation stipulates that separate pools are maintained for different classes of asset.  However, businesses still fail to properly maintain their pools meaning the full benefit of annual investment allowances are not fully utilised and identification of expenditure attributable to each individual property is not easily identifiable.   

How we Help:

  • We maintain all the different capital allowances pools and track expenditure going in and out each year.
  • We link qualifying expenditure across different pools by property.
  • We reconcile new additions against total capex records to identify any gaps.
  • We allocate the annual investment allowance in the most advantageous way.
  • We calculate any balancing allowances or balancing charges.
  • We provide the business’s accountant with an annual summary to feed into the tax return.

Benefit to the Client:

  • Reassured: that all potential allowances are claimed and details available on request.
  • Empowered: with information to make strategic decisions at the point of disposal.
  • Improved cash flow: tax relief position optimised.

Why use TFI Group?

+ Corporate Acquisition Due Diligence

Corporate Acquisition Due Diligence

The Issue: Corporate acquisitions often contain property, land or trading stock.  The full amount of tax relief is rarely claimed meaning there is often scope to add value for the new shareholders post acquisition.   

How we Help:

  • We form part of the due diligence team to do a targeted piece of work looking specifically at the latent value of unclaimed tax incentives.
  • We review the capital allowances claims (and land remediation relief claims) made by the company.
  • We reconcile the claimed tax incentives against the property, development and land holdings.
  • We summarise the risks and opportunities relating to that part of the acquisition.
  • We provide estimates of the latent value inherent in the acquisition.

Benefit to the Client:

  • Reassured: you will know the detail of what you are buying.
  • Empowered: with information to negotiate a better deal.
  • Improved cash flow: opportunities for tax rebates and tax planning opportunities realised.

Why use TFI Group?

+ Negotiation with HMRC

Negotiation with HMRC

The Issue:  A tax inspector typically has two years after the year end in which a claim has been made to raise an enquiry into a claim.  This can come in the form of eligibility or entitlement challenges from the tax inspector or from the Valuation Office / District Valuer on costs and land values respectively. 

How we Help:

  • We enter into correspondence with HMRC authorities either direct or through your accountant as instructed.
  • We construct legal arguments as necessary with reference to case law, legislation and HMRC’s own guidance notes.
  • We support any costs with reference to source pricing documents, our own database of costs or from industry recognised pricing sources such as Spons.
  • We keep our clients advised throughout the process and make recommendations as necessary to ensure a speedy conclusion to the enquiry.

Benefit to the Client:

  • Protected: against any unjustified reductions in claim values.
  • Improved cash position: reduced tax relief leakage.

Why use TFI Group?

+ Training

Training

The Issue: Successful claims often rely on a small amount of participation from a large range of people.  However, these people are rarely aligned, misconceptions and confusion abound and businesses rarely have the specialist knowledge to navigate their way through increasingly complex tax legislation.

How we Help:

  • We listen to understand what the key training requirements are.
  • We provide training for tax teams to help highlight the key tax planning opportunities.
  • We provide training for commercial and technical teams so they can procure in a more tax intelligent way.
  • We provide training for land buyers so they can ask the right questions.
  • We help bridge the gap between the various departments so everyone works towards a common goal.

Benefit to the Client:

  • Empowered: with the correct information to make better and more timely decisions.
  • Improved cash flow: ability to secure the best outcome throughout the project lifecycle.
  • Protected: against the possibility of delay due to incomplete information.

Why use TFI Group?

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