Integral Fixtures are you missing out?

Overall the treatment of “normal” capital allowances has been easily understood. There are items of plant called Integral fixtures which historically have been dealt with badly. These people have missed out on substantial tax relief.

Such fixtures are things in the buildings like air conditioning, plumbing, toilets and sanitary wear, kitchen units, electrical and heating systems. Whilst these things may appear small there is actually a substantial value in them; typically, they can consist of 10-30% of the total build cost.

Integral fixtures are available for farmers, general traders and furnished holiday lets. This rule change, however, is particularly poignant for Furnished Holiday Lettings. Although given the restriction of loss relief for Furnished Holiday Letting (2011-12) against other income, the allowances are not as much use as they once were.

Some thought should be given to this now as it is still possible to amend your 2010/11 personal tax return until 31st January 2013. You are well within your rights to make an historic claim going back as far as you like, however, probably anything past the mid nineties would not be worth while. These Integral capital allowances are not available to people with furnished full time lets- they must use the 10% wear and tear basis or the renewals basis. However, the latter is ceasing in 2012-13.

People with other income or substantial future profits from the property need to be aware of this change. Calculating these Integral Fixtures will probably involve employing a specialist capital allowance surveyor as, this goes beyond the work of a normal surveyor.

HMRC are trying to close the window on integral fixtures historical claims for purchases of property from April 2014 from there on seller must elect to pool the capital allowances. If it is not done at this stage it will preclude any capital allowance claims ever being made. Therefore, it is imperative that you seek good taxation advice before completing any commercial property transactions.

Statton and Co. are a firm of Chartered Accountants are based in Wadebridge and cover the surrounding areas of Camelford, Bodmin and Liskeard.

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