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Capital Allowances

Tax Services Across Capital Property Projects

Everything you need to make your business access the tax rebates you are entitled to.

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Equity may be satisfied by a proportional system as well as by a progressive system of taxation. However, the whole range of taxes and benefits should be considered in deciding how equitable a tax system is and should be considering when engaging capital allowances consultants.

Industry Expertise

Taxation imposed in accordance with appropriate standards of ability to pay or for benefits received will satisfy the requirement of vertical equity because the capital allowances on property improvements laws change frequently.


Investment in real property can be for a variety of reasons. Some people invest in houses and apartments to occupy themselves or to let to others. 


Some people invest in real property including vehicles either to occupy for business purposes or to enjoy a monetary return in the form of rent.

Property Fixes

People may invest in real property either for occupation as a residence, business, and other purposes or as an investment. 


This return in many cases, especially in times of economic growth and high inflation, may take into account any expected capital appreciation.

Capital Allowances Projects

Whatever the reasons for any investment in real property, the cost to a particular investor will be uppermost in his mind. A person who is not knowledgeable in the pros and cons in real property investment should seek professional advice in this area. A consultant on real property investments, such as a chartered surveyor, is required as a first step to identify the goals, objectives and constraints of any prospective investor involved in special rate pool laws.

Thereafter, an appraisal of the various costs can be carried out. Taxation will feature in those costs, and it could be a determining factor in deciding whether or not to invest in a particular property. An investor should consider when to invest: it makes no economic sense to invest at the peak of the property market. Although there are peaks and troughs in the property market, one cannot predict with reasonable certainty when the market has reached the peak.

Any adverse news can trigger a downturn as was the case of the financial crisis caused by the “casino” banks in late 2008. When the market is on a downward trend, an investor should wait until the market starts to pick up before he makes any large investment. One has to be extremely careful when to make the plunge. 

Costs and Taxes Relating to Investment 

An investor does not only have to pay a capital sum in acquiring a property, but would also have to incur other costs associated with the purchase. At this stage, he has to pay legal fees and stamp duty land tax (SDLT) as well. In the course of his ownership of the property, he has to pay council tax (in respect of his residence and other residential properties) or business rates (if occupied as a business place). It should be noted that it is the occupier who pays council tax or business rates, not necessarily the owner. If the property is let, the recipient of the rent has to pay income tax on the net income from the property, especially concerning hotel capital allowances.

When a property is disposed of capital gains tax (CGT) may have to be paid on any gain made in excess of the yearly exemption, though no CGT is paid on any gain made on the disposal of one’s main residence. Finally, on an individual’s death, inheritance tax (IHT) may have to be paid on the estate passing, subject to an exemption of £325,000 (2016-17), and any estate income arising during the period of administration would be subject to special provisions, as in the case of trust income. Click here to learn about capital allowances on residential property.

In all these respects, the effect of each tax which is likely to affect a particular investment has to be borne in mind as an important criterion in the optimal decision-making process of the investor. The object of capital allowances hotel, therefore, is to examine the various aspects of taxation and related matters to enable a prospective investor in real property to understand the operation of each tax that will affect his intended investment. Having obtained the required advice, he can then decide whether it is worthwhile making the particular investment. 

Most democratic countries today derive their notions of what constitute a good tax system from the four canons of taxation as propounded by the British economist, Adam Smith, over 200 years ago. These canons, though have since been elaborated and refined by others, are still recognised by economists and others as the criteria in considering any tax system.

The most fundamental principle in any tax system is that the imposition of any tax must be fair to all in that it must be based on one’s ability to pay. To understand fully see capital allowances explained. Those in equal circumstances should pay an equal amount of tax (horizontal equity) and those in unequal circumstances should pay different amounts (vertical equity).

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