Capital allowances firm Catax Solutions has claimed that UK commercial property owners are sitting on an estimated £1 billion in unclaimed tax relief.
However, starting on 1 April 2014, when the 2012 Finance Bill will finally be implemented following a two-year transition period, a sizeable proportion of that unclaimed tax relief is going to be lost forever, the firm says.
From that moment on, unless unclaimed capital allowances are identified and documented at the point at which commercial properties are bought or sold, they will be lost forever.
Mark Tighe, managing director of Catax Solutions, said: “Unless they sit up and take note of the legislative changes that are now upon us, Britain’s commercial property owners will be haemorrhaging tax relief in the coming financial year — and every year thereafter.
“If capital allowances aren’t identified and documented at the point of sale then they will be lost forever, meaning a loss of thousands, tens of thousands or even hundreds of thousands of pounds to the buyer or seller. And right now, there’s no doubt whatsoever that a very large percentage of transactions will take place this year without this happening: the awareness simply isn’t there.
“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 relief. 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.”