Budget comment for the property industry
“The Chancellor has announced that Capital allowances are going down from April 2012. Writing down allowances will be reduced, from 20% to 18% for general plant and machinery and from 10% to 8% for special rate expenditure which includes integral features.
This will particularly impact on taxpayers with significant rolling capital expenditure programmes, such as those operating in the retail, leisure and hotel sectors.
The future lower main rate of corporation tax will not compensate capital intensive companies for this further deferral of capital allowances. As a consequence there will be an even greater incentive to ensure where possible that expenditure qualifying for 100% allowances is specified for construction and fit out projects, for example enhanced capital allowances.
The Annual investment allowance will also be reduced from April 2012 down from £100,000 to £25,000. This will impact most on enterprises will smaller capital expenditure programmes and will no doubt motivate some to accelerate capital expenditure plans.
The overnight increase in the higher rate of capital gains tax is likely to catch some buy to let and second home sellers on the hop and may well discourage potential vendors, thereby restricting the level of stock coming on to the market.”
Nick Cartwright, Head of property
T: 020 7131 4801
E: nick.cartwright@smith.williamson.co.uk
Our budget booklet will be available online from lunchtime on Wednesday 23 June see www.smith.williamson.co.uk/budget
For further information:
National Tax Director - Richard Mannion –020 7131 4252 / mob 07799 761326
Director, Private Client Tax, London - Geoff Everett - 020 7131 8370
Head of Corporate Tax – Tim Lyford – 020 7131 4213
Employment Tax and Incentives Director - Inez Anderson – 020 7131 4919
Head of Pensions & Financial Planning - Mike Fosberry - 020 7131 4250
Director, Pensions & Financial Planning Paul Garwood - 020 7131 4196
VAT director - John Voyez - 020 7131 4285
PR queries:
Kate Harrison 020 7131 4228
Matt Rowe 020 7131 4550
Disclaimer
By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.
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