New queries, issue 4565

Allowances unclaimed

If capital allowances on a building were unclaimed can the purchaser claim?

Company A arranged the construction of a commercial property in 2006 using a bank loan. That property was the company’s only asset and was leased to a trading company Company B which is associated to Company A by common ownership but not grouped with it.

The bank foreclosed the loan and so with the bank’s agreement Company B acquired the property from Company A at a much reduced current market value. This left Company A insolvent because the balance of the loan was outstanding. A liquidator was duly appointed.

Company A had never claimed capital allowances on the fixtures within the building. And accounts and a corporation tax computation were not prepared for the final accounting period up to the date of Company A going into liquidation due...