An Essential Guide for Commercial Landlords

At QuoinStone, we work alongside a specialist partner to provide our clients with the very best Capital Allowances advice. There are various capital allowance opportunities within commercial real estate, including development and refurbishments, property acquisitions, and more, providing a comprehensive overview of how these allowances can be leveraged to optimise financial outcomes.

Capital Allowances typically improve yields on purchases by between 0.20% and 1.00%. On developments and refurbishments they can reduce the net cost of projects by up to 25%.

Despite the clear benefits, Capital Allowances are still not being maximised by commercial property investors due to non-specialist advisors preparing claims, or due to them being overlooked completely (from an incorrect perception that there are no capital allowances available to them).

Following recent changes in the capital allowances legislation there have never been so many capital allowances tax reliefs available to property owners and occupiers (this excludes private dwelling units).

Let’s look in more detail at the opportunity for savings…

Capital Allowances on Development & Refurbishments

Typically, 99% of commercial property developments and refurbishments now attract some form of tax relief. The most advantageous being full expensing, which provides a full 100% tax relief in the year of expenditure.

Capital Allowances on Property Acquisitions

Capital allowances on commercial property acquisitions can lead to significant tax savings. For example, purchasing an office building for £2 million could yield £400,000 in qualifying assets like HVAC systems,

Capital Allowances Portfolio Service

A portfolio review for capital allowances would initially identify possible claims include allowances for plant and machinery (e.g., HVAC systems, lifts, and lighting), integral features (such as plumbing, electrical installations, and security systems), and specific trade-related items including walls and floors. This service is particularly beneficial for family offices, large investors, property funds, and corporations managing diverse property assets

Historic Capital Allowances Reviews

There is no time restriction to review historic expenditure, as long as the fixtures are still owned. It is not uncommon to review expenditure from 20-30 years ago which has never had a capital allowances claim submitted.