capital allowances - the opportunity

We are Specialists in Reclaimingyour Capital Allowances

Who are Portal Tax Claims?

• Part of the Portal Group whose main directors have been working together continuously since 1990.

• The Portal Group HQ is located in Rochester, Kent, operating from a 7,000 sq. ft. freehold, purpose-built office with over 100 PAYE employees.

What Capital Allowances are not!

• Not Capital Gains Tax

• Not the same as your ‘Capital Account’

• Are not effected by the ‘Charging balance’ when it’s time to sell [CA’s are not added back into the CGT calculation]

What exactly is a Capital Allowance claim?

Capital Allowances are retrospective claimsbased on the original purchase price. It is not acontentious tax avoidance scheme or loopholebut is based on established UK statutory lawdating back to 1878.

HMRC states that:

• It is your statutory right to claim- since 1878

• Every building has claimable allowances inherent withinthe purchase price

• Highly valuable form of non-conflicting relief, anestimated 96% of property owners are paying too muchtax by not claiming.

You are not a “guinea pig” as

thousands of cases have already

been submitted and paid out.

An estimated 96% of all UK commercial property

and furnished holiday lets have NOT claimed...

... There could be a cheque waiting for you!

Capital Allowances are overlooked?

BUT WHY?

This doesn’t have to be you...

THERE IS COMPLEXLEGISLATION INVOLVED

• All tax advisors come across Capital Allowances, however:

– The legislation is counter-intuitive……………. AND

…………..Opportunities are missed far too often

HMRC makes claiming difficult because

• Shrouded in complex legislation

• Specialist tax area not covered by accountants

• Requires many specific skill sets to identify &

claim

• Once again, only 4% of all UK commercial buildings have had their entitlement claimed

WHAT SPECIFICALLY CAN YOU CLAIM ON?

UK commercial Property

Furnished Holiday Lettings

... you need to know about First and Second Fix

V

• FIRST and SECOND FIX are what precedes the completed property

• You claim on ‘Plant & Machinery’ from the SECOND FIX when you

claim

There are significant differences in FIRST & SECOND FIX

What is FIRST FIX?

You cannot claim on these...

What is FIRST FIX?

FIRST FIX comprises all the work required to take a building from thefoundations to the application of plaster on the internal walls.

• FIRST FIX includes:• Walls

• Floors

• Ceilings

• Inserting cables for electrical

supply

• Inserting pipes for water supply

What is SECOND FIX?

... but you CAN claim on these.

What is SECOND FIX?SECOND FIX comprises all the work after plastering to the finished

building

• SECOND FIX includes:• Connecting electrical fixtures to

cables

• Connecting sinks and baths to

pipes

• Fitting doors into doorframes

• Lighting

• Installing cookers and washers

• Flooring

• Crown moulding

Where are the allowances hidden?

We find CA’s in two places:

• Inherent: in the very fabric of the building

• Current: in your Accounts – we scrutinise the ‘Capital’ and ‘Revenue’ accounts

What can YOU claim on?

THE POSSIBILITIES ARE ENDLESS!

Examples: Commercial Property

• Offices, Hotels, Medical Centres, Care homes, Public Houses, Retailoutlets, Shopping Centres, Cafés, Restaurants, Service stations,Estate agents, Banks, Dentists, Factories, Blocks of flats etc.

• Basically, Commercial property is real estate which is intended for useby ‘for profit businesses’.

Purchase Price £3,200,000

Identified CA £ 800,000

Client Benefit £ 224,000

Residential Flats, held within a company

Purchase Price £325,000

Identified CA £187,000

Client Benefit £ 74,800

Freehold Pub

Purchase Price £325,000

Identified CA £107,800

Client Benefit £ 43,120

High Street Shop

Purchase Price £3,178,764

Identified CA £1,226,429

Client Benefit £ 343,400

Nursing Home

Purchase Price £1,200,000

Identified CA £ 470,000

Client Benefit £ 131,600

Office Building

Purchase Price £11,487,230

Identified CA £ 4,190,034

Client Benefit £ 1,173,209

Hotel

FHL

• Holiday accommodation (furnished) either in the UK, or inthe EEA. Can be a villa, flat, singular or multiple bedrooms.Any type of property.

• It has to be available to rent for a minimum of 140 daysper year.

• It has to be actually rented out, for a minimum of 70 daysper year.

• Losses can be set against any income, as well as CAs.

*** HMRC Changes in April 2011

Purchase Price £365,000

Identified CA £121,666

Client Benefit £ 48,666

Holiday Apartment

Purchase Price £2,750,000

Identified CA £ 825,000

Client Benefit £ 330,000

Holiday Villa

ARE YOU ELIGIBLE FOR A RECLAIM?

• To be eligible, the following criteria MUST be met:

– UK commercial taxpayer

– Own UK commercial property or a furnished holiday let

(FHL)

– Purchase price: £200k+ [300k+ EEA area]

– Cannot be owned by a pension, charity, developer or

Government

– You MUST have paid UK tax the past two years or aregoing to pay tax in the future

OUR CURRENT OFFERINGS

• UK Commercial Property > £200K

• Furnished Holiday Lets (FHL) within the UK > £200K

• Furnished Holiday Lets (FHL) within the EEA > £300K (collectively)

• Multi-Let & HMO Portfolios > £1,000,000

The taxman will take your money.

Don’t let this be you!

IF YOU MEET THIS CRITERIA...THE TAX MAN PROBABLY OWES YOU

THOUSANDS OF £££££££££££

YOU CANNOT LOSEIf we fail to find you at least £25,000 of unclaimed CapitalAllowances, you will owe us nothing

• Capital Allowances areintended to encourage you toinvest but because they aremisunderstood, they are not being claimed

• Claims can be retrospective

• There is no time limit on howfar back you can go

• Doing this does not affect yourCapital Gains Tax position if yousell your property

The processOnly one claim per building in it’s lifetime

• We have to contact ALL owners back to 1996

• If we validate that no previous claim has been made– We arrange a FREE survey by an Independent RICS

surveyor

– Accountants prepare the report using HMRC matrices

The process…..• We submit the report to your Accountant

– Your Accountant, promptly, submits the report on-line to HMRC

– If requesting a Tax refund – HMRC pay in 21 days

TIMESCALE: 8 Weeks from instructions

We are experts

We use an Independent Surveyor who works with complex

tables and internal HMRC- approved matrices to compile a

detailed, accurate, compliant, non-confrontational and

robust report in a format approved by HMRC.

The result is that our reports have a 100% sign-off rate

with the client’s accountants and HMRC.

IT BEARS REPEATING....

YOU CANNOT POSSIBLY LOSE

If we fail to find you at least £25,000 of unclaimed allowances

- You will owe us NOTHING!

How do you get your money?

Example: £1 Million of indentified Plant & Machinery claim, assuming the higher rate of corporation tax at 28%

Tax year 20%WDA Balance Tax saving

£ 1,000,000 £ 280,000

2008/2009 £ 200,000 £800,000 £56,000

2009/2010 £160,000 £640,000 £44,800

2010/2011 £128,000 £512,000 £35,840

2011/2012 £102,400 £409,600 £28,672

Total Tax saving of £165,312 over 4 years (59%)

*WDA= Annual writing down allowance

• Can claim tax back for 2 years• CA claim worked through until balance falls below £1000• Excludes AIA. You don’t have to take to full 20%

Our Terms of Business

• No report – No Fee

• No up front Fee

• No Survey Fee

• Fee 6% plus VAT of the total claim identified

– Fee paid in two parts: 7 days and 28 days

– Fees only invoiced following report acceptance by your Accountant