Capital Allowances Savings

A client who was a landlord with a small portfolio of commercial industrial units who told us they were considering selling the properties.

Red Dot advised the client that there was an opportunity to maximise income tax savings on the integral fixtures and fittings within the fabric of the building. This was something the client was unaware of.

The tax saving arises from additional tax relief claimed called Capital Allowances. These are not normally available on property, but can be claimed on fixtures within the building itself. In order to quantify this it is necessary to undertake a detailed survey of the building to identify those integral fixtures within the building which can be claimed. This is a very specialised area so we introduced our client to a Capital Allowances specialist from our network of trusted professionals.

In this instance, the work had to be completed within a very tight deadline of two weeks in order to make full advantage of the tax savings for our client. Normally our consultants charge a fee based on a proportion of the savings, but in this case due to the deadline they worked on a fixed fee.

Our client was sceptical at first, and was reluctant to incur costs of over £2,000 with no guarantee of savings. From our experience we knew that whilst the quantity of savings could not be predicted with any certainty we were confident the client would make savings in excess of the costs.

Our client trusted us and authorised the work to proceed.

The end result was that we were able to make tax savings totalling in excess of £40,000 – a great result for our client and a real buzz to us that our client’s trust in us paid off so well.