Further Details

In December 2008, HMRC revised and updated their guidance as to which areas of properties qualify for these tax reliefs. The legislation now includes the communal areas of HMO / multi-let type properties. These communal areas are, for tax purposes, deemed to be ‘non-dwelling’ areas, and therefore qualify for Plant & Machinery Capital Allowances relief.

Capital Allowances tax relief has been around, in one form or another, since 1878. These are widely used by the commercial sector and are also available to individuals who own qualifying properties. Capital Allowances cover a number of tax relief strategies including Plant & Machinery Allowances Relief.

The current governing legislation is CAA2001. (Capital Allowances Act 2001)

Plant & Machinery Allowances Relief

Plant and machinery for HMO’s & Multi-let properties includes:-

heating and air-conditioning, wiring to fixed plant, switchgear, emergency lighting, fire alarm installations, sanitary fittings, hot water installation, carpets and removable floor coverings, fittings and furniture, firefighting equipment, mechanical door closers, security equipment, telecommunications installations, trade and information signs etc.

This list is by no means exhaustive but provides a guide to the plant & machinery most commonly found in these types of properties.

In addition, expenditure incurred on certain other assets including fire safety, thermal insulation and building alterations incidental to the installation of plant and machinery may also be eligible.
The rate of relief varies from 100% in the year of purchase (AIA / FYA), to 10% (WDA).

Other allowances are available, but these are largely restricted for companies and are not largely applicable to HMO or multi-let property owners.

Who Can Claim?

• You must be a UK Tax Payer (Either Income tax, or Corporation tax)
• You must use the assets in course of a trade.
• You must incur the capital expenditure.
• There must be ‘qualifying’ items of expenditure or ‘qualifying’ buildings.

What Can Be Claimed?

Expenditure incurred on:-

• The original purchase of the property
• Any Refurbishment or alteration works to existing property

You can read the fine details of all the Capital Allowance schemes on the HMRC site.

How much can I save?
Click here for a personal Illustration