White Knight Associates on capital allowances tax relief for HMO owners.

White Knight Associates recently met up with a commercial accountant who told us about this amazing new tax relief scheme for anybody who owns a HMO.

WK Associates found If you own a HMO, you may be able to take advantage of Capital Allowances Tax relief, to mitigate your previous and current year’s tax liability.

Whether you are an armchair property investor, entrepreneur, or own just 1 HMO property, you could mitigate your current liability, and also get a refund from HMRC for previously paid tax!

White Knight Associates explains what Capital Allowances are.

Plant & Machinery Capital Allowances, relate to the tax relief associated with certain qualifying items within the communal areas of HMO properties.

Having recently come into the limelight do to a technical clarification by HMRC, these allowances are an extremely valuable tax relief. You can reclaim tax paid up to 5 years previously.

Once these items have been identified, valued and documented, you can reclaim previously paid Income tax, reduce your current year income tax liability, or roll forward the allowances until such time when they are required, depending on how long you have owned the property.

There is no time restriction on claiming – a property you have owned for 10 years, can qualify!

Capital Allowances provide a deduction for tax purposes in lieu of the depreciation charged in the accounts on Capital Expenditure. They are of direct relevance to every legal entity, operating in the UK with the exception of those that are tax exempt.

Capital Allowances tax relief has been around, in one form or another, since 1878. These are widely used by the commercial sector and are also available to individuals who own qualifying properties.  Capital Allowances cover a number of tax relief strategies including Plant & Machinery Allowances Relief.

Plant & Machinery Allowances Relief

Plant and machinery for HMO’s includes:-

heating and air-conditioning

lifts

wiring to fixed plant

switchgear

emergency lighting

fire alarm installations

sanitary fittings

hot water installation

carpets and removable floor coverings

fittings and furniture

demountable partitioning used for trade flexibility

fire fighting equipment

mechanical door closers

security equipment

telecommunications installations

trade and information signs

vehicle control equipment

window cleaning equipment and assets used to create ‘atmosphere’ or ‘ambiance’ in a hotel, restaurant or public house.

This list is by no means exhaustive but provides a guide to the plant & machinery most commonly found in buildings.

In addition, expenditure incurred on certain other assets including fire safety, thermal insulation and building alterations incidental to the installation of plant and machinery may also be eligible.

The rate of relief varies from 100% in the year of purchase (AIA / FYA), to 10% (WDA).

Other allowances are available, but these are largely restricted for companies and are not largely applicable to HMO owners.

Who Can Claim?

Must  be a UK Tax Payer (Either Income tax, or Corporation tax)

Must incur the capital expenditure.

Must be ‘qualifying’ items of expenditure or ‘qualifying’ buildings.

WK Associates explains what Can Be Claimed?

Development of property

Fit out works

Refurbishment or alteration works to existing property

Purchase of property

WKA tells you how much can be saved?

Typically, between 15% and 25% of the purchase price of a HMO property will qualify for Plant & Machinery Capital Allowances Tax relief.

Purchase Price                                   Capital Allowances available (tax free income)

£100,000                                                           £20,000

£120,000                                                           £24,000

£140,000                                                           £28,000

£160,000                                                           £32,000

£180,000                                                           £36,000

£200,000                                                           £40,000

£250,000                                                           £50,000

£300,000                                                           £60,000

£350,000                                                           £70,000

n.b. – these allowances are averages, based on previous work undertaken, your property may attract more, or less capital allowances. Your claim is based on purchase price, qualifying expenditure, and the total communal areas of the property. This is a guide only.

For further information or to arrange a survey on YOUR HMO properties, you can contact Barry Williams below.

http://www.wk-associates.com/

02033847230

White Knight simplifies Commercial Property Tax Claims

White Knight Associates on Capital Allowances

What Are Capital Allowances?

When you spend money buying or improving a property, HMRC allows you to offset some of that expenditure against your profits, or general income for tax purposes.

It’s your statutory right to claim.

By allowing a retrospective or current acquisition claim based on the purchase price. It is not a contentious tax avoidance scheme or loophole but is based on established UK statutory law dating back to 1878.

You are not a “Guinea Pig” as thousands of cases have already been submitted and paid out.

Will I qualify?

To claim capital allowances you (or your company) must satisfy the following criteria:

·     You are a UK taxpayer (Income Tax or Corporation Tax)

·   You own a UK commercial property with a minimum purchase of £200,000

·   OR you own a furnished holiday property either in the UK with a minimum purchase price of £200,000 or within the EEA with a minimum purchase price of £300,000 (collectively)

·   The property is not held fully within a pension fund, charity, government owned or traded as stock

White Knight Associates are an agent for a specialist capital allowance claims company Portal Tax Claims that works in collaboration with your existing advisers to identify and create retrospective and current capital allowance claims that lead to significant tax refunds. By adding value, our accounting and surveying experts identify previously unclaimed Capital Allowances reliefs that were part of the purchase price but were never identified during the buying process.

Typically we find Capital Allowances equivalent to 25% of the property’s purchase price and, if we don’t secure at least £25,000 in unclaimed allowances, you won’t owe anyone a penny.

Best of All……

Capital Allowances can be offset against any income  that they derive from.

If a company owns the asset, you can use the allowances against that company’s taxable profits and then against any other company within the same tax group, if a loss is created. Claims can be retrospective as there is no time limit on how far you can go back, in owning the property and you can even go back two tax years for a tax refund !

What Capital Allowances Can Be Claimed

It is routine for accountants to claim capital allowances for “movable” fixtures and fittings in a shop, for plant and machinery in a factory, or for furniture in a furnished holiday let. They cannot claim such allowances for the “immovable” fabric of the building, however, which is viewed as a non-depreciating asset. The opportunity we are concerned with is the class of assets in the grey area between “movable” and “immovable”. Clearly office furniture is movable and the roof is immovable. But what about air-conditioning plant, emergency lighting and alarm systems? These are normally considered by accountants as “freehold improvements” and not therefore eligible for capital allowances.

Even when businesses or individuals hear about our service, there is a common misconception that, because the expenditure occurred in the past, they have missed the boat. Not so! Indeed there is no time restriction on when you can claim these allowances.

For more information on capital allowances for commercial property please visit our website White Knight Associates Source Portal Tax Claims

Capital Allowance Breaking News

White Knight Associates (WKA) has some breaking news to pass on.  A consultation paper has just been issued by HMRC proposing fundamental changes to the rules for capital allowances claims for fixtures in commercial properties. This paper follows the announcement in the 2011 Budget that the Government would be consulting on a ‘mandatory pooling’ proposal.

The proposal is aimed at preventing allowances from being given more than once on the cost of a fixture.  If the proposals in the consultation paper take effect as drafted, and become legislation in the 2012 Finance Bill, it will have a lasting impact on all businesses and property investors. It is therefore very important that you know how these proposals could affect you:

Key proposals:

·        Buyer and seller will be required to agree a capital allowances transfer value and notify HMRC of all sales within one to two years. It is thought that this would 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 a s198 tax election for £1 will be withdrawn and transfers will be made at tax written down value, reducing the ability to limit claw back of  capital allowances claimed;

·         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’);

Reason for change:

·         HMRC consider that the capital allowances history of acquired fixtures have not been satisfactorily checked by taxpayers to date;

·         This has led to the perception that claims are being made numerous times on the same fixtures at increasing value, due to the current inefficiency of tracing the tax history;

· This has been backed by HMRC acknowledging that they do not have adequate records or controls to track the tax history of former owners. Transfer values of all property sales are now to be recorded at the time of sale to correct this issue.

Actions you should take:

·          Contact WKA now for free, no obligation advice, tailored to your needs;

·          Consider making additional capital allowances claims now where you have not already made a claim or where there could be an under claim.

Currently, the wording of HMRC’s consultation does not prevent additional claims being made before properties are sold.  However, due to the imminently expected change you may wish to fully secure your rightful capital allowances benefits while you still can;

·        You should consider transferring properties inter group with s198 election for £1 to lock in capital allowances claims today as future third party sales seem increasingly likely to require transfers at tax written down value;

·        The consultation paper does not address the practical implications of a large amount of property transfers.  It makes no reference to how the transfer value is to be calculated if both parties are non-tax payers (such as charities).   Additionally, if the seller did not fully claim their allowances, it is not clear what flexibility, if any, there is for the purchaser to make any additional claims.

It is clear that there are a number of uncertainties and ambiguities to consider. No doubt many issues will be raised in the consultation process and more information will be available throughout the consultation period.

WK Associates, as one of the industry’s most proactive experts, intend to take an active role in lobbying during the consultation period. Please make sure you look out for our regular updates and feedback.

If you would like us to include your comments please let us know by email to info@wk-associates.com

With every change that HMRC try and introduce there is an opportunity for clients; White Knight associates will ensure we give you the best chance to take advantage of that opportunity.

Source: www.portaltaxclaims.com

For more information and a free evaluation to see if you can claim contact us at:

 http://www.wk-associates.com/



or call:
WKA on 0203 384 7230

Introduction to Commercial Property Tax Claims - by White Knight Associates

White Knight Associates (WKA) work in partnership with a specialist capital allowance claims company called Portal Tax Claims who work in collaboration with your existing advisers to identify and create retrospective and current capital allowance claims that lead to significant tax refunds and offsets. By adding value, their accounting and surveying experts identify previously unclaimed Capital Allowances reliefs that were part of the purchase price but were never identified during the buying process and have therefore not been claimed. In fact 96% of UK commercial property owners have yet to make this claim.

Capital Allowances can be offset against any income that you have. If a company owns the asset, you can use the allowances against any other companies’ taxable profits within the same tax group. Claims can be retrospective as there is no time limit on how far you can go back in respect to expenditure incurred whist owning the property and you may even receive a refund of the tax paid in the FOUR previous years. So long as you’ve paid tax, the property isn’t held in your pension, SIPP or other wrapper that already attracts tax relief then that’s a serious chance you can claim.

WHAT CAPITAL ALLOWANCES CAN BE CLAIMED?

It is routine for accountants to claim capital allowances for “movable” fixtures and fittings in a shop, for plant and machinery in a factory, or for furniture in a furnished holiday let. They cannot claim such allowances for the “immovable” fabric of the building, however, which is viewed as a non-depreciating asset, however most accounts we’re dealt with do not understand this particular claim and therefore it’s a missed opportunity.

THE OPPORTUNITY

The opportunity WK Associates are concerned with is the class of assets in the grey area between “movable” and “immovable”. Clearly office furniture is movable and the roof is immovable. But what about air-conditioning plant, emergency lighting and alarm systems? These are normally considered by accountants as “freehold improvements” and not therefore eligible for capital allowances. Even when businesses or individuals hear about our service, there is a common misconception that, because the expenditure occurred in the past, they have missed the boat. Not so! Indeed there is no time restriction on when you can claim these allowances.

WHAT ARE CAPITAL ALLOWANCES?

When you spend money buying or improving a property, HMRC allows you to offset some of that expenditure against your profits, or general income for tax purposes.

ITS YOUR STATUTORY RIGHT TO CLAIM

By allowing a retrospective or current acquisition claim based on the purchase price. It is not a contentious tax avoidance scheme or loophole but is based on established UK statutory law dating back to 1878. You are not a “Guinea Pig” as 1500 cases have already been submitted successfully by Portal and they boast a 100% success rate. White Knight Associates acts as an introducing agent for Portal and we are more than happy to help you investigate whether you have a claim to be made or not.

What’s more… to find out it wont cost you a penny. If we fail to find £25,000 or more in missed allowance you don’t pay for anything. Request more information click here