Solicitors are responsible for asking and replying to Commercial Property Standard Enquiries relating to capital allowances. Where their responsibilities end in interpreting and actioning the answers is unclear; although the dicta in the case of Hurlingham Estates v. Wilde & Partners makes it clear that Solicitors are under an implied duty to advise on tax consequences unless specific exclusions to their retainer are made.

Prior to the introduction of Finance Act 2012, if a Solicitor acting for a Buyer in a commercial property conveyance did not adequately address capital allowances and the contract was silent on the issue, this could result in a distinct advantage for the Buyer. However, after 31 March 2014, if that same situation occurred, in most cases, the exact opposite would be the case.

For transactions which completed after 31 March 2014 there is a distinct probability that no capital allowances would be available to the Buyer whatsoever if appropriate steps are not taken prior to exchange of contracts.

It will not be good enough to simply ascertain that the Seller has not claimed capital allowances and assume therefore that such allowances can be automatically claimed by the Buyer.

From 31 March 2014 there is no margin for error. Failure to determine the entitlement to capital allowances for the Buyer AND to include appropriate contractual provisions may result in capital allowances being completely denied to the Buyer.

How can DHA Consulting help?

To help Solicitors manage this increased risk, DHA Consulting has designed and developed a completely new service for Solicitors – The Capital Allowances Entitlement Search.