capital allowances

Live from one of his spellbinding events, Shaz answers a pertinent and important question about the differences between HMOs and SAs when it comes to capital allowances.

KEY TAKEAWAYS

• When it comes to serviced accommodation, for all expenditure that you incur, you can reclaim quickly for anything that is fixed to the building that is not an inherent part of the building itself.
• Negotiate with your seller when it comes to capital allowances. You have two bites at the cherry: when you first purchase a property, and then when you refurbish the property.

BEST MOMENTS

'For serviced accommodation it is well worth doing!'

'Find out if the previous person has claimed for any capital allowances'

VALUABLE RESOURCES

shaz@aaa-accountants.co.uk 

ABOUT THE HOST

Shaz Nawaz is a serial entrepreneur; he owns five thriving businesses in diverse sectors.

Shaz is committed to helping business owners build successful businesses. Having conducted over 3,000 business growth consultations he has helped his clients generate millions in additional profits. His purpose is to inspire business owners to build businesses that are hugely profitable and sustainable.

He is a huge advocate of having multiple streams of income. He has written a number of business books and regularly contributes articles to mainstream media outlets.

You can find Shaz on:

•   Facebook
•   LinkedIn
•   Instagram
•   YouTube.

Shaz talks about capital allowance pools and how they work, with a focus on capital allowance and property investing.

KEY TAKEAWAYS

• You can claim less than 18% of your plant and machinery pool, but you may not exceed 18% when claiming.
• If you don't create a taxable loss, then numbers may be reduced the following year, so it's always wise to claim the full amount where possible.

BEST MOMENTS

'The rate is determined by the government'

'You create a taxable loss and carry it forward'

VALUABLE RESOURCES

shaz@aaa-accountants.co.uk 

ABOUT THE HOST

Shaz Nawaz is a serial entrepreneur; he owns five thriving businesses in diverse sectors.

Shaz is committed to helping business owners build successful businesses. Having conducted over 3,000 business growth consultations he has helped his clients generate millions in additional profits. His purpose is to inspire business owners to build businesses that are hugely profitable and sustainable.

He is a huge advocate of having multiple streams of income. He has written a number of business books and regularly contributes articles to mainstream media outlets.

You can find Shaz on:

•   Facebook
•   LinkedIn
•   Instagram
•   YouTube.

Shaz talks you through a practical example about how to better understand VAT and capital allowances, and the benefits that can be achieved when converting from commercial to residential.

KEY TAKEAWAYS

• When looking to buy a property it is wise to find out about the exact VAT situation. When you make the offer, make it clear that you want to convert from commercial to residential, and ask if they will accept a VAT 1614D.
• Elements of a building that are subject to capital allowances are any part of the property that are not inherently provided by the structure itself.

BEST MOMENTS

''When you sell the property at some point in the future, you must charge VAT on the disposal'

'These capital allowances have different pools'

VALUABLE RESOURCES

shaz@aaa-accountants.co.uk

ABOUT THE HOST

Shaz Nawaz is a serial entrepreneur; he owns five thriving businesses in diverse sectors.

Shaz is committed to helping business owners build successful businesses. Having conducted over 3,000 business growth consultations he has helped his clients generate millions in additional profits. His purpose is to inspire business owners to build businesses that are hugely profitable and sustainable.

He is a huge advocate of having multiple streams of income. He has written a number of business books and regularly contributes articles to mainstream media outlets.

You can find Shaz on:

•   Facebook
•   LinkedIn
•   Instagram
•   YouTube.

Mark Winship is joined by Alan Cadden from Cavetta Consulting, to discuss the all-important topic of capital allowances. Many view tax information as somewhat dry, but as Mark and Alan explain, the amount of money you could be saving through capital allowances can often be staggering to investors. Listen as the "best kept secret in property" is discussed.

KEY TAKEAWAYS

• Capital allowances apply to fixtures and fittings for commercial properties. HMRC are willing to give an allowance for anything that degrades in these properties over time.
• Your alternative to NOT claiming for capital allowances is to pay more to HMRC. This is the simple fact of the matter. Only 30% of commercial property investors claim capital allowances.
• Capital allowance claims can be used on properties such as hotels, let apartments, serviced accommodations, so long as the property is not a primary residence.

 BEST MOMENTS

'Capital allowances are the best kept secret in property'

'If you do this in the first couple of years this can be very advantageous'

'Landlords can be sat on situations where they can maximise their profits, and increase return on investment'

 VALUABLE RESOURCES

This Property Life - https://podcasts.apple.com/gb/podcast/this-property-life-podcast/id1540075591       

Property Wealth System YouTube - https://www.youtube.com/c/PropertyWealthSystem 

ABOUT THE SHOW

This Property Life is hosted by the team at Property Wealth System. We are a collective of experienced active investors passionate about all things property.

Mark Winship is an experienced property investor and mentor with a portfolio of HMO and Serviced Accommodation properties across the UK. Mark’s background in coaching high performance athletes has lead to a passion for mentoring people to achieve their life goals using property investment as a vehicle.

Caroline Claydon Caroline Claydon has over 22 years experience in investing in property but it’s only the last 12 years she’s operated as a professional investor.  Her and her husband have built their portfolio throughout the UK covering strategies from buy to let’s, social housing, HMOs, developments and more recently a hotel.  She has travelled the world training people for the last 10 years on how to invest, scale and accelerate their UK property businesses regardless of where they are based.   Caroline loves helping people reach their full potential by changing their mindsets to money, debt, property and investing. 

James D’Souza started investing in property from a young age and now owns a significant portfolio of buy-to-let properties, professional HMO’s and commercial developments. Whilst actively growing his own property business, James helps countless other people start and scale their own property journey.

CONTACT METHOD

You can join Mark, Caroline and James along with a whole host of other like-minded investors in the Property Wealth System Facebook Community:

https://www.facebook.com/groups/propertywealthcommunity

Mark Email: mark@propertywealthsystem.co.uk

Mark Linkedin: https://www.linkedin.com/in/mark-winship-68b34833

Caroline Email: caroline@propertywealthsystem.co.uk

Caroline Linkedin: https://www.linkedin.com/in/caroline-claydon-property/

James Email: james@propertywealthsystem.co.uk

James Linkedin: https://www.linkedin.com/in/james-d-souza-552342104/

In this episode we will be discussing capital allowances, in particular the super deduction.

As an incentive to encourage and accelerate capital investment and drive growth, the Government announced a series of generous capital allowances measures in the recent 2021 Budget. 

Throughout this episode we’ll be discussing the background to the new relief and an overview of what it covers and how it works; some of the key issues we’ve noticed and have been discussing with our clients; and as well as the practical advice and assistance we’re able to provide to our clients.

SOCIAL MEDIA:

Twitter - @SmithWilliamson
LinkedIn - @Smith&Williamson

CREDITS:

Hosts: Zoe Thomas, Martin Dye
Producer: Laura Burrows

GET IN TOUCH:

Have any feedback? We're listening, email us at: podcast@smithandwilliamson.com

This episode was recorded on 29/04/2021

This S&W The Pulse podcast is of a general nature and is not a substitute for professional advice. No responsibility can be accepted for the consequences of any action taken or refrained from as a result of what is said. The views expressed are not necessarily those of the presenter or of Smith & Williamson or any of its affiliates. No reproduction of this podcast may be made in whole or in part for professional or recreational purposes. No action should be taken based on this podcast and we accept no liability if we change your views on any of the subjects mentioned.

Tax and Government legislation is that prevailing at the time, is subject to change without notice and depends on individual circumstances. Clients should always seek appropriate tax advice before making decisions. HMRC Tax Year 2021/22.