In the recent Budget, the Chancellor’s announced a surprise increase in the Annual Investment Allowance available for expenditure on plant and machinery from the current maximum of £250,000 to £500,000. The new rate applies from 1st April 2014 for companies and from 6th April 2014 for income tax. In both cases this rate of relief expires on 31st December 2015.

This means that there is an opportunity for fantastic tax advantages for companies and individuals that purchase plant and machinery.  Plant and machinery includes fixtures and integral features of buildings.  This means that these tax advantages are available to companies and individuals that purchase commercial property, build new commercial property or make improvements to commercial property.

The rules on the availability of capital allowances on the purchase of second-hand commercial property also changed from April 2014. The new rules mean that the purchaser must enter an election with the vendor to pass on the capital allowances and the vendor must have identified all of the qualifying expenditure before the election can be completed.

With all the changes in rules and the fantastic potential tax benefits that can be obtained, it is very important that you obtain specialist advice to ensure that you maximise the tax savings.  Please do not hesitate to contact Sara Crowther if you would like to discuss the application of the new rules to your circumstances.