Making a Capital Allowance Claim
Under Capital Allowance regulations an owner of a bed & breakfast may make a Capital Allowance claim for their property if they purchase, build, or refurbish the property.
So if you purchase a bed & breakfast you may then make a claim on any previously unclaimed Capital Allowances from the previous owner(s). Before 2014 however, because it was not always clear whether the previous owner had made already a claim for Capital Allowances, it resulted in duplicate claims being submitted to HMRC for Capital Allowances on the same property by different owners.
HMRC needed to take action so on 1 April 2014 new regulations came into effect meaning that if you purchased a Bed & Breakfast after 2014 then the value of Capital Allowances you could claim would not be based on your purchase price, but on the previous Capital Allowances identified by the previous owner.
This caused an issue for a lot of new property owners after 2014 because so few people had heard of Capital Allowances, it meant that many properties didn’t make claims before 2014 so there was no historical figure to base new Capital Allowances claims on.
What does this mean for you?
If you purchased your bed & breakfast before 2014 then you can stop reading and click here to start making your Capital Allowance claim now.
But if you did purchase your bed & breakfast after 2014 then I recommend that you ask your account and/or solicitor to look into the Capital Allowance Act 2001, Section 198. The Act contains important legislation regarding the sale of commercial properties, and if you purchased the property more than two years ago you may not be able to make a claim if previous Capital Allowances were not identified by the previous owner.
If you purchased the property within the last two years however, you may still have time to submit a Capital Allowance claim.
Buying a Bed & Breakfast
Whether you have purchased a Bed & Breakfast in the years following 1 April 2014, or you are looking to do so in the future it is important that you get the right advice now to see what options may be available to you, whether a previous claim on Capital Allowances has been done or not.
Get in touch today, and see how we can help.