Commercial Property Owners to lose out on tax relief
According to capital allowances tax specialists Catax Solutions, commercial property owners are set to lose more than three quarters of a billion pounds in unused tax relief over the next few years.
The 2012 Finance Bill will come into force on 1 April 2014. On this date all unclaimed capital allowances relief must be identified and crystallised when properties are bought or sold or it will be lost forever.
Cataz are concerned that very few people involved in commercial property transactions are sufficiently up-to-speed with the impending changes to the tax regime.
They believe that a very large percentage of transactions are likely to take place where all unclaimed capital allowances relief is lost to either the buyer or seller forever.
Mark Tighe, Managing Director, Catax Solutions said: " Unfortunately, the loss of a sizeable tax benefit is only the start.
"Things are likely to get litigious for any party that oversaw the transaction – whether lawyer, broker, accountant or financial adviser – when their clients discover that they have lost potentially sizeable tax reliefs.
“If awareness levels stay as they are then, from a legal standpoint, the next few years could be fractious and represent a considerable financial threat."
Matt Sullivan, Head of Business Development, The Law Society, added: "It’s only a matter of months before a seismic shift takes place in the commercial property market, but too few parties have made anywhere near the necessary preparations.
“Lawyers, especially, need to be fully up-to-speed with their obligations under the new regime, as failure to do so could cost their clients sizeable amounts in lost tax relief."