< Back to Latest News Studies Newsletter: Talking Tax Issue 30 (June 2024)

June 2024

– Reflection of May 2024 –

Capital Allowances Update

Construction of a Care Home

Over the past couple of months, Zeal have worked with a care home provider and their accountant to maximise the tax savings available through capital allowances, on the construction of care homes. Our client had spent more than £15m to build 2 modern care home facilities. 

Following site surveys of the properties, Zeal analysed the total project costs. This included a meeting with the project manager to collate all the relevant documentation and evidence to support the claim for capital allowances.

In total, Zeal identified £4.3m qualifying for plant & machinery capital allowances and a further £4.8m qualifying for Structures & Buildings Allowances (SBAs).  As the expenditure was incurred partly in a period when the super deduction was available, Zeal ensured all qualifying assets were identified and subject to the additional 30% uplift from the super deduction. The balance of costs of approximately £5m related to the purchase of the land & associated fees, plus professional fees for planning and contract legals. 

In summary, the capital allowances identified of £9.1m will save our client over £2.2m in corporation tax!

Purchase of Flats for Self-Catering Accommodation

Zeal had a fantastic result last month for a client who had purchased 10 new build residential apartments for use a self-catering holiday accommodation. In fact, there were planning constraints on the new development that restricted the use to holiday accommodation only.   

The 1 & 2 bedroom apartments were acquired direct from the developer for approximately £2.2m. The standard specification included a fitted kitchen, bathrooms, carpets, electrical and heating systems etc. Essentially it was a brand-new home! All these embedded fixtures purchased with the proeprty qualify for capital allowances tax relief.

Our team prepared 10 detailed capital allowances valuations reports, which not only identify the qualifying expenditure, but provided support for the claim to tax relief when the claim was submitted to HMRC. In summary, Zeal identified £497,555 of the £2.2m as qualifying for capital allowances. This reduced the corporation tax due in September 2024 by £124,388!

Purchase of a Vets – small but mighty!

Zeal pride ourselves on helping any client no matter how big or small. In many cases, the small claims make the biggest difference!

Last month we helped a client that had purchased a property that is used as a Vets practice for £196,445 (including SDLT & legals) in 2010. Zeal was able to identify that £24,278 of the £196,445 qualified for tax relief!

Whilst £24,278 is not a huge tax deduction, as the client pays income tax at the 40% rate (plus Class 4 NI), this will generate total tax & NI savings in excess of £10,000! Our client was over the moon to receive an immediate cash refund of £3,000.

NEW PARTNER – Supported Living Gateway

Capital allowances can be claimed on properties used as care facilities. This can provide significant tax savings for care businesses and significantly increased ROI’s for landlords investing in supported living care facilities.   

Over the years, Zeal have assisted businesses and investors in the care and supported living sector. We have worked with National Care Providers from Swanton Care Group, Potens Care Group, Positif Care and Orbis Education & Care to smaller independent care providers and individual property investors. Being able to claim capital allowances has a major impact on the affordability of capital projects and encouraging investment in this sector.

Specialist Tax Advice Update

Article: Furnished Holiday Let Tax Update [June 2024]

Following the announcement of the proposed abolishment of the Furnished Holiday Let (FHL) tax regime in the Spring Budget, Zeal have been working closely with Key stakeholders in the industry to support them in lobbying the Government to rethink their plans.

This article sets out a summary of the latest position and everything else you need to know, including:

For help with Embedded Capital Allowances or Specialist Tax Advisory, please contact Zeal on hello@gozeal.co.uk or 01633 287898.