Capital allowances on offices 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, Cat A and Cat B fit outs
Lease Premiums
Contributions paid towards tenant fit out expenditure
Offices can often include complicated services installations which means that it is essential to understand how the services function and are incorporated within the building. For example, sometimes elements of the building fabric are incorporated within the Heating, Ventilation and Air Conditioning Installations such as the façade, ceiling and raised access floor.
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% - 40%
Acquisition of second hand property (restricted)
3% - 15%
New Build
30% - 50%
Cat A fit out
30% - 65%
Cat B fit out
60% - 85%
How we can help?
Acquisitions
Provide early advice at heads of terms to ensure the Buyer's 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
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
£15m high specification office development by property fund. Provided early pre-tender advice and applied quantity surveying assessments to extract qualifying expenditure. Identified additional capital allowances of £6.5m (43%).
£15m Office co-working specialist fit out by owner occupier Carried out detailed review of project cost and specification information and liaised with client accountant. £12.3m (82%) of capital allowances identified.
£200m acquisition by property fund. Capital Allowances restricted by historical capital allowances election Carried out detailed survey of property and identified unusual qualifying expenditure which is often missed. Claimed additional capital allowances of £30m (15%).
£6m Capital Contribution paid towards tenant office fit out project. Provided early advice to landlord regarding specific wording within Agreement for Lease. Landlord was able to claim capital allowances on 100% of the contribution paid.
£20m CAT A fit out and refurbishment. Provided pre-tender advice to project team to help maximise capital allowances position for the landlord. Detailed capital allowances survey confirmed that raised access floor and suspended ceiling £16m (80%) Capital Allowances identified.
Carried out historical capital allowances review of 40 acquisitions made over a 30 year period for High Net Worth Individual. Forensic research of documentation with minimal client disruption. Client received in an instant tax refund from the tax authorities of £500,000 plus additional future tax savings of £4m.
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.
