Strategic Transaction Planning

Working with you from the earliest stages of buying or selling property.

Whether you are buying or selling property, we work with you at the earliest stages of any transaction to make sure that you maximise your capital allowances.

To achieve this, we can undertake activities such as incorporating tax clauses into sale or purchase contracts, discretely negotiate with the vendor or purchaser and prepare elections to fix capital allowances values. Our strategic advice takes account of clients specific needs and drivers and can result in substantial tax savings.

For example, the previously altered Integral Features regulations mean that a new and unrestricted claim for general power, lighting and cold water can be made on all first acquisitions after April 2008, even now. These assets have considerable value, and the additional allowances could be worth as much as 10% of the transaction’s total value.

Acquiring and disposing of property can be a rewarding but costly business; a property’s financial performance, its return and yield can be significantly enhanced by effective tax planning.

Issue

The business case and speed of acquisition have long been key factors governing property acquisition strategies; leaving little time for peripheral considerations. But with increasing competition, purchasers and property owners are demanding more of their property assets. Tax relief can provide significant returns, but is rarely included in a property acquisition or disposal; when it is included, the advice is often too late.

Relief

Capital Allowances are available to purchasers who incur capital expenditure when acquiring property. This relief is deducted from profits and can easily be matched against capital outlay. As such, it can represent significant cash savings - either as a claim on an acquisition or by retaining tax relief on a disposal. Sometimes, the saving can be through the transaction, if arranged and negotiated with the other party.

Approach

We are a team of tax qualified property professionals with senior level experience at the Big 4 Accountancy firms. As a result, we understand the development issues, and all the tax and accounting aspects of construction projects. We are specialists who can work alongside your own tax and project advisers. Offering a complete service, we can undertake feasibility and entitlement reviews through to claim preparation and securing the best possible claims with HMRC.

Detail

The tax relief is available to owners who buy and sell property for the purposes of their trade. Whilst capital elections can often be used to jointly fix disposal and claim values, and are now absolute for capital allowances in transactions since the changes to the regulations in 2012/2014 involving the pooling and fixed value requirements, there is still an opportunity new unclaimed relief to be available on some transactions after April 2008, for first transactions. As anti-avoidance and disclosure legislation can severely impact on the transaction planning strategies, it’s vital that the relevant parties are fully briefed on all the latest tax implications.

Opportunities

• Considering tax implications at the pre-acquisition or disposal stage ensures that potential claims can be incorporated into the transaction strategy.

• Thoroughly reviewing historic claims can determine future transaction tax strategies.

• As time elapses, the benefits of sale and leaseback arrangements are reducing e.g. Finance Act 2004.

• Planning the transfer of a business as a whole or in parts can optimise the tax planning available.

• Failing to consider tax sufficiently early enough may reduce potential savings, but some relief may still be available.

• Changes to the capital allowances rules mean that all commercial properties acquired after April 2008 are likely to have substantial unclaimed allowances.