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Have you 'fixed' your possible fixtures?

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Have you ‘fixed’ your possible fixtures issues yet?

For  sometime now it has been quite common for the purchaser of a building to engage a specialist to review the fixtures therein so as to undertake a “harvesting operation” to obtain any capital allowances overlooked or unclaimed by previous owners, writes Margaret Connolly, Partner and Head of Taxation services at Reeves.

For sales of buildings after April 2014, the purchaser will, in most cases, only be entitled to these allowances if the previous owner has identified and pooled all qualifying expenditure prior to the sale of the building.

This means that property owners such as charities and pension funds who had previously been able to ignore capital allowances, will now need to address this issue if they wish to achieve the best price on a sale of a building.

The capital allowances landscape has recently witnessed a second significant change, and this one is already in force.  From April 2012, the vendor and purchaser of a building are required to agree the value of the fixtures for capital allowance purposes – if they fail to agree, a determination will be made by an independent tribunal.

The reasoning behind this change is that HM Revenue & Customs (HMRC) has finally lost patience with the practice of the two parties submitting wildly different figures in their respective tax returns.

Clearly then, this is an area of growing complexity, but there remain substantial opportunities for the well advised.  The Reeves Capital Allowances Team is ideally placed to guide you safely and tax efficiently through the maze.

Should you wish to discuss this area further please contact Margaret at Margaret.connolly@reeves.co or any of the corporate tax team at Reeves on 01227 768231.




Author:Reeves

Source:www.reeves.co