A Solicitor’s Guide to Capital Allowances in Property Transactions

Incorporating capital allowances into commercial property transactions represents a significant opportunity for solicitors to optimise tax benefits for their clients.

Whether acting for the seller or the buyer, Ryan aims to provide you with the knowledge and insights necessary to raise the issue of capital allowances with your clients as early as possible. The eligibility and value of a claim depends on multiple criteria, and assessing this is complicated. It’s important that your clients, whether they are vendors or purchasers of commercial property, obtain expert capital allowances advice as early as possible in the transaction.

What Should You Consider When Acting on Behalf of the Purchaser?

For buyers, understanding the availability of unclaimed capital allowances on acquired properties is crucial. As the buyer’s solicitor, you should advise your client to conduct thorough due diligence to identify and quantify any potential capital allowances that can be claimed post-purchase. This process often involves engaging specialist capital allowances consultants who can assess the property and identify qualifying assets.

What Should You Consider When Acting on Behalf of the Seller?

On the other hand, sellers stand to benefit from maximising capital allowances prior to the sale of a property. As the seller’s solicitor, you should advise your client to review their capital expenditure history and ensure all eligible assets are properly documented and claimed for capital allowances. By doing so, the seller can enhance the property's attractiveness to prospective buyers and potentially increase its market value.

Important: As a commercial property solicitor, you must ensure that your clients remain compliant with HMRC regulations throughout the transaction process. This includes accurately documenting and disclosing any capital allowances claims, as well as adhering to relevant deadlines and requirements. Failure to comply with these regulations can result in potential disputes or penalties, highlighting the importance of meticulous legal oversight.