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Capital Allowances

The capital allowance regime provides tax relief for capital expenditure. The rules are complex and where significant capital investment is planned, early advice from our highly experienced team can lead to significant tax savings and / or cashflow advantages.

Plant and Machinery

The rate of capital allowances varies according to the type of expenditure incurred, but most plant and machinery is included in a general pool, which attracts an annual writing down allowance at 18%, calculated on a reducing balance basis. Certain items of plant and machinery are put to a special rate pool with slower allowances at 6% per annum.

Opportunities exist however to claim enhanced first year allowances of more than 100%, or to accelerate capital allowances through short life asset elections in respect of plant that is expected to be scrapped or disposed of within eight years or acquisition. We can show you how to plan expenditure to maximise the savings from these opportunities.

Property

If you are planning to spend money on property you will want to get the maximum tax relief possible. Capital allowances are regularly available on many fixtures included within buildings and are often overlooked. These range from heating and electrical systems through to sanitary ware and kitchens. In addition, capital expenditure on the construction or purchase of a commercial building typically benefits from a structures and buildings allowance. 

Whether you are an owner, occupier, investor or a developer, property transactions present particular capital allowance opportunities and complexities. We can provide the requisite specialist capital allowance advice, if you are looking to:

  • acquire or dispose of a second hand property
  • construct a new property
  • acquire a newly constructed property
  • refurbish, alter or extend an existing property