New Time Limit On Capital Allowances Claims

The Government is proposing to issue a consultation document regarding claiming capital allowances on fixtures and fittings in commercial property. At present there is no time limit over which expenditure can be claimed.

Whilst it is only possible to amend previous claims going back two years, it is currently possible to amend the claim say for the year-ended 31 July 2009 based on new information about expenditure incurred in 1999 that has been overlooked.

Our understanding is that from April 2012, HMRC are looking to introduce a two year deadline from the actual date of purchase meaning that all properties bought prior to April 2010 (that have not already been subject to a capital allowance claim) will be disqualified from obtaining tax relief from April 2012.

In view of the proposed changes owners of commercial property, hotels etc, will have a fairly short time window until April 2012 to claim tax relief on historic qualifying expenditure that may have been overlooked previously.

It is often the case that property owners fail to undertake a thorough tax review of the qualifying expenditure and it might be that you purchased or developed a property some years ago.

If you think you might be caught out by the proposed new time limit, please get in touch – 0115 721 0900