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The new Super-deductions announced in the March 2021 Budget were specifically excluded for Companies that incur expenditure on assets for leasing such as Landlords.
On the 18th May 2021 an amendment to Clause 9 of the Finance Bill 2021 confirmed that the 130% Super-deduction on Main Pool assets (increased from 18%) and 50% Special Rate Pool assets (increased from 6%) will now be available to leased plant. This will mean that property companies will be able to benefit!
So if a landlord spends £1m on main pool items such as kitchens, toilets, carpets and fire alarms etc.. they can deduct £1.3m against their rental income in year 1 rather than 18% (i.e. £180k).
On Special Rate Pool expenditure such as heating, air conditioning and lifts, if a landlord spends £1m they can deduct £500k in year 1 rather than 6% (i.e. £60k, with the remaining 50% to be applied against the Annual investment Allowance (AIA).
These Super-deductions are still only available to companies and not individuals or LLP's and apply to new expenditure on plant and machinery (i.e. unused and not second-hand) up to the 31st March 2023.
Specific claw back rules apply on disposals within certain timeframes.
Specific details will be published within HMRC guidance notes and the Finance Act.
