Capital Allowances are a form of tax relief available on capital expenditure incurred on commercial property. Such expenditure may relate to development, acquisition, fitting out or refurbishment or by way of landlord contributions towards tenant works.
Capital Allowances are in lieu of depreciation adjustments within the accounts, and are available to corporation or income tax payers as a means of reducing taxable profits generated. This essentially provides an incentive to businesses to invest in property, and can help improve the post tax yield of an investment.
The legislation is governed through The Capital Allowances Act 2001, which is being constantly reviewed and updated, with much of the rules being defined through relevant case law.
Capital allowances and related tax reliefs include the following:
● Plant & Machinery Allowances
● Enhanced Capital Allowances
● Business Premises Renovation Allowances
● Furnished Holiday Lettings Allowances
● Land Remediation Relief
● Research & Development Allowances