Capital allowances on trading premises

A business had acquired a property for £1.3m and we obtained a quick and full corporation tax refund of £70 000 on the fixtures value of the building before the time limit for annual investment allowance (AIA) expired.

But the exact same building and claim could have a very different tax cash flow outcome depending on the circumstances of the company and when it purchased the building. Length of the accounting period time limits new or second-hand expenditure and profits are all factors.

Sometimes the prognosis of the claim value in shipping forecast terminology can be ‘good becoming poor’. Why is this? The overall value may look good but once the timing of the allowances is established the benefit can start to look poor. Homework to establish how and when the value comes – before throwing the kitchen sink...