Capital allowances on Leisure properties are available to both Landlords and Tenants and can be claimed on the following types of expenditure;
Acquisition of second hand property
Acquisition from Developer
New build expenditure including refurbishments and tenant fit outs
Lease Premiums
Contributions paid towards tenant fit out expenditure
Common types of qualifying leisure property include; Hotels, Restaurants, Pubs, Cinema, Bowling Alleys and Gyms.
Leisure properties often include trade specific assets which can be claimed in addition to the standard items of plant and machinery. For example, decorative assets used to attract customers into the leisure space.
How much can be claimed?
The level of capital allowances will depend upon the nature of expenditure and level of specification however typical benchmarks are as follows;
Type of Expenditure
Level of Qualifying Expenditure
Acquisition of second hand property (unrestricted)
20% - 35%
Acquisition of second hand property (restricted)
2% - 10%
New Build - Landlord
25% - 45%
Fit Out - Tenant
40% - 80%
How we can help?
Acquisitions
Provide early advice at heads of terms to ensure the Buyers position is protected, including liaising with the legal and transaction teams to provide appropriate wording within the heads of terms and purchase contract
Carry out initial review and due diligence to conclude entitlement and restrictions in accordance with the Capital Allowances Act 2001
Liaise with Sellers to obtain relevant historical project/cost information for Structures and Buildings Allowances purposes
Obtain details of historical contribution allowances claimed
Survey and prepare fully disclosed capital allowances reports for submission to HMRC
Liaise with client accountant and tax advisors throughout process
New Build Expenditure
Provide early advice to project team including tender wording and capital allowances strategic and planning advice
Survey and prepare fully disclosed capital allowances reports including identifying repairs, plant and machinery allowances, Structures and Buildings Allowances and Land Remediation Expenditure
Provide advice to both Landlord and Tenants regarding capital contributions paid and received in respect of tenant fit out expenditure
Liaise with client accountant and tax advisors to ensure the capital allowances identified reconcile to the client accounts
Pooling claim prepared for £5m Turnkey hotel development on behalf of Property Fund. Early pre-acquisition advice provided to ensure 'Pooling Wording' is included within purchase contract to protect Buyers position. Liaised with Sellers project, finance and legal team. Prepared pooling claim for £2.6m (52%) and associated CAA 2001 s198 election to pass 100% of benefit […]
Acquisition and fit out of 15 Pubs for £20m by Pub Group. Capital Allowances restricted by historical capital allowances elections. Provided pre-acquisition advice, carried out detailed survey of each property and project to identify qualifying decorative expenditure which is often missed. Claimed additional capital allowances of £6m (30%).
£9.1m High specification restaurant fit out by owner occupier. Early involvement to understand extent of qualifying building alterations and trade specific decorative assets. £8.5m (93%) of plant and machinery allowances and £0.6m of Structures and Buildings Allowances (SBA's).
£38m High Specification Hotel refurbishment for owner occupier. Early pre-contract advice provided to ensure correct level of cost information is provided on multiple construction packages. Detailed capital allowances survey undertaken to identify qualifying decorative assets. Combined quantity surveying and tax expertise identified £34m (89%) of Plant and Machinery Allowances plus £4m of Structures and Buildings […]
£4m Pub acquisition and Redevelopment to high specification. Report required within two weeks of instruction. Liaised directly with client project team, carried out detailed capital allowances survey to assist with quantity surveying assessments. Claimed additional capital allowances of £2.2m (55%).
We prepare fully disclosed capital allowances reports for both property acquisitions and enhancement projects.
Strategic advice
We provide strategic advice throughout the property cycle including s198 elections, contributions and land remediation relief.
Due diligence
We liaise with the client and their advisors to ensure that the capital allowances position is protected during the acquisition, disposal and leasing of property.
Initial reviews
We offer a free initial review to establish if a capital allowances opportunity exists. This review is carried out with minimal time and disruption to the client.
Negotiation with the tax authorities
We apply an enquiry mitigation strategy to all of our client work. Our experience and extensive knowledge of tax legislation and case law enables us to assist with potential HMRC enquiries.
