Are you a property owner in the UK? If you own commercial property or a furnished holiday let, understanding capital allowances can open the door to significant tax savings. This guide explains what capital allowances are, who can claim them, and how they can benefit your finances.
1. What Are Capital Allowances?
Capital allowances provide tax relief on certain property-related expenses, allowing you to deduct costs associated with items like equipment, fixtures, and plant machinery from your taxable income. The result? A reduced tax bill. Eligible items range from essential fixtures to security systems, and understanding what qualifies is the first step to unlocking these savings.
2. Who Can Claim Capital Allowances ?
Both commercial property owners and furnished holiday let (FHL) landlords can claim capital allowances. By claiming, you can effectively lower your taxable income and reduce your overall tax liabilities. Plus, you may even be able to backdate claims, potentially reclaiming overpaid tax from previous years.
3. How to Claim Capital Allowances
The process begins with identifying qualifying expenses. This can include anything from property refurbishments to new equipment installations. After identifying these expenses, you can offset them against your taxable profits. Consulting a tax professional can be invaluable here—many property owners miss out on eligible deductions simply because they’re unaware of the full range of qualifying items.
4. Tips for Maximizing Your Capital Allowances
To maximize your claim, keep a detailed record of all property-related expenses, and consider working with tax professionals who understand capital allowances thoroughly. For example, if you’ve recently purchased a property, you might be eligible to claim allowances on fixtures and fittings that came with the purchase. Proactive record-keeping and expert advice can help ensure you’re not leaving potential savings on the table.
Ready to Claim Your Capital Allowances?
Claiming capital allowances can lead to substantial savings, and there’s no reason to let these benefits go unclaimed. To ensure you’re maximizing your tax savings, get in touch with our experts. We are ready to guide you through the process, so you can unlock hidden tax savings for your property.
