HMRC calls time (limit) on Capital Allowances

Arthur Kemp at EXACT! says new legislation means that anyone who buys property since April 2014, has 2 years to claim Capital Allowances or the tax relief is lost forever.


  • Any business or persons operating from their own premises or thinking of buying business premises
  • Property surveyors
  • Property estate agents
  • Conveyancers
  • Financing commercial property


all need to know that HMRC have introduced time limitations on claiming tax relief for acquisitions of ALL commercial properties.


HMRC have adopted a ‘use it or lose it’ approach to Capital Allowances. For new purchases, the buyer has only 2 years to agree and claim this tax relief, or they get nothing.


HMRC have introduced 2 measures affecting claims to capital allowances on commercial property:-

1. Fixed Value Requirement

If a purchaser of a commercial building wants to claim capital allowances, he must enter into a joint election with the vendor within two years of the purchase.

If a value can’t be agreed, either party can apply to the Tax Tribunal to fix an apportionment of the price;


2. Pooling Requirement


A buyer will only be able to claim if the seller has ‘pooled’ the capital allowances.


It will as if the seller is claiming the capital allowances in their tax return, but then agrees to formally pass those allowances on to the buyer. If the capital allowances qualifying expenditure is not pooled by the seller in time then no capital allowances will ever be available to the buyer or any future owner of the property.



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