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Apartment Block - £1,200,000 of allowances

A city centre block was purchased from a developer. The developer had held the property in trading stock and was not entitled to claim Capital Allowances thereby allowing the owner an unrestricted claim to Capital Allowances.

Typical claimable plant includes: Space heating, transformers, electrical system, fire alarm, lifts and CCTV.

The purchase cost was £8,000,000. Stuart Rivers Associates generated £1,200,000 of allowances on an apportionment basis from the common areas only in the property - i.e. the corridors, lifts, stairwells, shell retail areas and plant rooms.

This produces an overall tax saving for a 20% taxpayer of £240,000 for the investor with a first year saving of £28,800 excluding the impact of the Annual Investment Allowances (AIA). If the owner was able to benefit from the full value of the current AIA (£200k) then the first year tax saving would increase to £64,000.