Industrial Buildings Allowance

[Barnyparker]

[FONT='Verdana','sans-serif']When does a building become an Industrial Buildings so I can claim the 4% capital gains.[/FONT]
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[FONT='Verdana','sans-serif']Does it only count if built and not if purchased?[/FONT]
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[FONT='Verdana','sans-serif']Thanks for any help in advance[/FONT]
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[FONT='Verdana','sans-serif']Steve[/FONT]

 

[Scalloway]

The 4% allowance does not apply to Capital Gains. There is a 4% Capital Allowance against Income or Corporation Tax, which is being phased out in March 2011. To claim the building must be in use.

 

[Barnyparker]

We have a Building on an Industrial Park, which contains offices, we manufacture alarms and doors, and hold stock. Am I right in thinking that this is an Insustrail Building and we should have been claiming our 4% allowance. And can this be back dated for the past 2 tax years???

Thanks for your help

 

[David Griffiths]

Is this a new building? Did you have it built from scratch, or buy it from somebody who had used it before?

 

[Barnyparker]

We moved in, in 2004. I'm trying to find out who owned or what it was used for before.

I take it Industrial buildings allowance can only be claimed once?

 

[David Griffiths]

The allowance is (broadly) for the construction of a building, or for the purchase of the building from the builder or developer.

It is not available for "second hand" buildings, but there may well be a claim for capital allowances on substantial parts of the building.

 

[Barnyparker]

For example, tarmacing a carpark, fitting bathroom etc???

 

[KM-Tiger]

It is not available for "second hand" buildings ...

That's not my experience, having been able to make use of 25 years worth of IBA over 6 years as we purchased in year 19. My understanding is that IBA can be transferred.

The extent of my knowledge - it was handled by our accountant - is that all the right paperwork from the vendor must be in place. Forewarned, we made this a condition of the conveyance.

 

[Barnyparker]

Thats how I remembered it from the AAT, but don't know enough about it, certainly worth looking into though

 

[Tom Egerton]

IBAs are allowable on second hand buildings but you'll need to find out from the vendor quite a bit of information. You'll need details of its original cost (excluding the land), whether IBAs have been claimed and for how many years, the "residual value" for IBA purposes etc. You will qualify as you're a manufacturing outfit but if the buildings change their use e.g. to a warehouse the 4% will cease. As has already been said everything is changing from next April anyway. This really is a job for an accountant who knows the rules.

 

[David Griffiths]

That's not my experience, having been able to make use of 25 years worth of IBA over 6 years as we purchased in year 19. My understanding is that IBA can be transferred.

The extent of my knowledge - it was handled by our accountant - is that all the right paperwork from the vendor must be in place. Forewarned, we made this a condition of the conveyance.

That's correct, but the claim is on the original building cost (excluding land and other items) to the extent that there are unexpired allowances. Sorry for not making that clear