We work with a number of lawyers, accountants and property agents to provide capital allowances advice to their clients.
Since the pooling requirement (CAA 2001 s187A) was introduced in April 2014, we are increasingly involved with up front capital allowances due diligence, including reviewing the Heads of Terms, CPSE replies to enquires, consequently reviewing and drafting contract wording and CAA2001 s198 elections for inclusion in the sale and purchase contracts.
We have recently advised a property client in relation to a planned disposal. The client had built the property in 2012, but had never claimed any capital allowances. A potential purchaser had enquired about the availability of allowances.
IMH Advisory LLP were instructed to prepare a fully disclosed analysis to identify the Plant and Machinery Allowances (PMA). This PMA was provided to the tax advisor to be claimed in a current tax return. This will satisfy the pooling requirement.
We then liaised with the client and its property agent to provide advice on the disposal, explaining the impact and tax benefit of claiming the PMA, either by retaining the allowances or passing the balance to the proposed purchaser. Finally we worked with the clients’ solicitor to ensure that the agreed approach was reflected in the CPSE replies and the final CAA2001 s198 election was completed and submitted to HMRC.