Acquiring an Asset
Establish a clear entitlement, preserve it through the contract and support it with the correct valuation and evidence
We investigate the ownership and claims history and advise on due-diligence enquiries, contract wording and elections. Where required, we prepare the specialist valuations and supporting evidence needed to establish a robust capital allowances position.
Clear entitlement at every stage of the transaction
The capital allowances position depends on who owns the asset, who owned it previously and whether qualifying expenditure has already been claimed. Some acquisitions will legitimately produce little or no additional relief; others may contain significant allowances.
We establish the chain of entitlement, identify the applicable requirements and restrictions, and define the action needed to preserve legitimate claims through the transaction. We help the parties understand the capital allowances value within the deal, ensure that elections and allowance statements are valid, and prepare specialist apportionment valuations on the appropriate basis.
Establish the entitlement to claim
We investigate the property’s ownership, expenditure and capital allowances history to determine who may claim, what expenditure remains available and which statutory requirements or restrictions apply.
Define the position during due diligence
We review the Heads of Terms, Commercial Property Standard Enquiries (or due-diligence questionnaires in Scotland) to identify missing information, inconsistencies and actions required from the seller.
Preserve the position in the contract
We work with the client’s legal and tax advisers to ensure the agreed capital allowances treatment is properly reflected in the sale contract, including the necessary pooling obligations, elections, allowance statements, warranties and post-completion information requirements.
Prepare the appropriate valuation and claim
Where a specialist valuation is required, we prepare detailed schedules using the basis appropriate to the party claiming and the underlying transaction history. A seller’s claim for its own expenditure and a buyer’s acquisition valuation involve different entitlements, evidence and valuation approaches.
Where necessary, we can also provide expert support in capital allowances disputes and appeals before the First-tier Tribunal (Tax Chamber).
Acquisitions experience
Examples of how we have established entitlement, addressed transaction restrictions and prepared specialist valuations across different acquisition scenarios.
Developer to non-taxpayer to buyer
Entitlement Issue
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The Seller was a pension fund who acquired the property from a developer. Tenants had carried out multiple fitouts. The Buyer’s entitlement therefore depended on confirming the seller’s tax status, investigating the developer’s historic position and confirming tenant works.
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Transaction action
​Written warranties confirmed the pension fund’s tax status, licenses to alter confirmed the extent of tenant works and separate post completion review secured the information required about the developer.
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Result
We prepared a detailed capital allowances report documenting the chain of entitlement and supporting the valuation. The buyer’s tax adviser submitted the resulting claim to HMRC.​​​
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Purchase price: £8.9m
Qualifying fixtures: £1.8m
SBAs: Not applicable
Taxpayer to non-taxpayer to buyer
Entitlement Issue
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The Seller was a pension fund who acquired from a tax-paying investor. The claim was restricted by a £1 election but had some integral feature items the original Seller was not entitled to claim and some new additions by the pension fund.
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Transaction action
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Written warranties confirmed the pension fund’s tax status, while cooperation provisions secured access to historic construction information. A review of title documents established the ownership history, and post-completion surveys and licences to alter confirmed the relevant landlord works.
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Result
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We prepared a detailed capital allowances report documenting the chain of entitlement and supporting the valuation. The buyer’s tax adviser submitted the resulting claim to HMRC.​​
Purchase price: £37m
Qualifying fixtures: £1.4m
SBAs: Not applicable
Taxpayer to taxpayer to buyer
Entitlement Issue
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The Seller was a taxpayer who had not claimed their full entitlement. Without a valid claim by the Seller the Buyer would automatically be restricted to nil. The property had also gone through various owners with past elections so the Buyer's claim was limited to the Seller's qualifying expenditure.
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Transaction action​
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The legal obligations were confirmed in the contract with access to details and timeline for completion.
​Result
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We prepared the seller’s capital allowances claim with full supporting disclosure, together with the subsequent elections and allowance statements required to preserve the buyer’s position.​​
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Purchase Price: £17.5m
Qualifying fixtures: £1.85m
SBAs: £400k
Different properties and ownership histories require different routes to relief. In every case, entitlement must be established before the valuation is prepared.