Office Purchase - additional allowances of £2,160,000

This project consisted of the purchase of a multi-storey air conditioned office building for £28,000,000.

The property was bought from a pension fund who had signed a Capital Allowances Act 2001 s198 election for £1,000,000 with the former owner.The sale and purchase contract contained a warranty preventing our client from claiming capital allowances in excess of £1,000,000.

We identified items of plant & machinery that had not been claimed by the former owner (plenum ceilings), together with determining that the original £1,000,000 Capital Allowances Act 2001 s198 election had been disapplied by HMRC, resulting in a claim of £3,160,000, £2,160,000 greater than originally anticipated.

We also drafted, negotiated and agreed a side agreement with the pension fund to ensure that our client was not in breach of the warranty contained in the sale and purchase contract.

Our work produced an overall tax saving for a 23% taxpayer of £496,800.