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New Build Warehouse - Allowances of £112,000 identified

INDUSTRIAL CONSTRUCTION

A group of property investors who had constructed a warehouse in June 2011 appointed Stuart Rivers Associates in March 2012 to complete a review for tax saving purposes.

The works comprise the construction of a single storey warehouse together with external works and drainage.

The building is of steel frame construction, clad in exterior steel profiled wall and roof cladding. New internal partitions, internal doors, internal finishes, sanitary installations were added along with new mechanical and electrical services.

CAPITAL ALLOWANCE SAVINGS

Stuart Rivers Associates analysed the construction expenditure of £450,000 and generated £112,000 capital allowances, producing an overall tax saving of £44,800.

With the Annual Investment Allowance set at £100,000 for this period, there was a potential to the owner to benefit from £40,500 of the overall saving in the first year.

Claimable items included:

  • Integral features such as cold water systems, water heating systems, space heating systems, ventilation systems, electrical systems and PV solar systems.
  • Other items of plant & machinery including Gas installation serving heating plant, Fire alarm and smoke protection system, security alarm system, disabled alarm, telecom containment, kitchen fittings, door locks, latches and lever handles, door closers/panic bars, sanitary accessories & appliances, shutter doors manual/electrical operation.

IMPORTANT CONSIDERATIONS

Capital Allowances are among the most valuable and least exploited methods of reducing commercial property investors’ and owners’ income tax and corporation tax liabilities.

They can be claimed for capital expenditure incurred on:

• The construction of a new property.

• The purchase of an existing or newly built property.

• Building alterations and refurbishments and the fit-out of let property.

The timing of claims is particularly important and recent reforms have brought this aspect of claiming Capital Allowances into even sharper focus.