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Purchasing and supply chain management - At your disposal

Capital allowances rules have changed, and those buying or selling commercial property have much to lose if they get it wrong. Jake Iles explains how to make the most of the reliefs still available.

Government pressure to collect taxes since 2008 has significantly impacted capital allowance legislation. That has encompassed both integral features and writedown allowances. More recently, following broadsheet headlines, the Finance Act 2012 (FA12) introduced requirements to ensure sellers and purchasers only obtain the relief they are legitimately entitled to.

The changes that were introduced are designed to tackle what has been perceived as widespread tax avoidance around acquisition and disposal of property, with a particular focus on buyers and sellers apportioning different amounts to fixtures and fittings, which has resulted in allowances being claimed by both the buyer and seller on the same expenditure, and within an undetermined time frame. In future, capital allowances as valuable tax relief, while still available, will be harder to come by; without specialist advice the allowances will be lost for good. Importantly, those owners who continue to hold a building and have not claimed can still do so – one element of the rules that remains intact.

This is an extract from the Finance & Management Magazine, Issue 223, July/August 2014.

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