What is Embedded Capital Allowance

Unlock Hidden Tax Savings in Commercial Property

Have you ever heard of Embedded Capital Allowances and wondered how they could benefit you? Understanding this concept could lead to substantial tax savings if you are a business owner, holiday let landlord or commercial property investor. In this blog, we’ll explain how it can put money back in your pocket.

What are Embedded Capital Allowances?

Embedded capital allowances are tax reliefs hidden within the value of a property’s fixtures and fittings. These fixtures, such as heating systems, electrical installations, and security equipment, are integral to the property’s function but distinct from the building itself.

How Do Embedded Capital Allowances Work?

When you purchase a property, you’re not just buying the bricks and mortar; you’re also acquiring these embedded fixtures and fittings. The beauty is that you can claim tax relief on their value, reducing your overall tax bill.

Why Should You Care?

They present a golden opportunity to save money on taxes without making additional investments. Whether buying a new office or factory or investing in commercial properties, maximising these allowances can significantly impact your bottom line.

How to Claim Embedded Capital Allowances:

1. Identify Eligible Assets

Take stock of the fixtures and fittings within your property that qualify for capital allowances. This includes lighting systems, air conditioning units, and even the fire alarm. Alternatively, instruct Complete Capital Allowance to complete a survey of your property and guide you through the process.

2. Seek Professional Guidance

While claiming embedded capital allowances may seem straightforward, seeking advice from tax professionals or specialised advisors is essential. Complete Capital Allowance will help you navigate the process and maximise your tax benefits.

3. Review Documentation

Gather all relevant documentation, including invoices and receipts, to support your capital allowance claim. Thorough record-keeping is key to a successful claim. Once again, Complete Capital Allowance can assist if you don’t have this to hand.

4. Include in Tax Returns

When filing your tax returns, make sure to include your claim for embedded capital allowances. Depending on your jurisdiction, specific forms or sections may be dedicated to this purpose. Alternatively, let Complete Capital Allowance manage this process and liaise directly with HMRC if required.

Embedded capital allowances are a valuable but often overlooked tax benefit for commercial property owners. By understanding and maximising these allowances, you can keep more money in your pocket while remaining compliant with tax regulations. 

Don’t miss out on tax breaks; take advantage of what is on offer! Explore the potential of embedded capital allowances today and unlock hidden tax savings in commercial property investments.

For more information on how Complete Capital Allowance manages the process, please visit our website page here.