Disposing an Asset
Establish the seller’s claim, preserve its value and leave the buyer with a clear, documented position
We review the ownership and claims history, identify outstanding seller claims and advise on due-diligence enquiries, contract wording, elections and allowance statements, helping the transaction team establish and document a robust position before completion.
Protect value through every stage of the disposal
A disposal can be the final opportunity to identify and claim qualifying expenditure incurred during ownership. Historic acquisitions, refurbishment projects, tenant works and incomplete records may all affect the seller’s position and the value available to either retain or transfer.
We establish the seller’s entitlement, prepare any outstanding valuation schedules and help the legal and tax teams reflect the agreed treatment through the Heads of Terms, due-diligence replies and transaction documents.
Establish the seller’s position
We review the ownership, expenditure and claims history to determine what has already been claimed, what may remain available and which statutory requirements or restrictions apply.
Prepare outstanding claims
Where qualifying expenditure has not been fully analysed, we prepare specialist valuation schedules using the seller’s historic costs and supporting records. This may include acquisition expenditure, refurbishments, extensions and other works completed during ownership.
Define and negotiate the transaction position
We advise on the Heads of Terms and responses to Commercial Property Standard Enquiries (or due-diligence questionnaires in Scotland) so that the proposed treatment of capital allowances is clear to both parties.
Preserve the agreed position
We work with the seller’s legal and tax advisers to reflect the agreed treatment in the contract and prepare the required elections, allowance statements, warranties and post-completion obligations.
Where necessary, we can also provide expert support in capital allowances disputes and appeals before the First-tier Tribunal (Tax Chamber).
Disposals experience
A disposal should not transfer uncertainty. We help the seller realise legitimate relief, meet the applicable requirements and provide the buyer with a clear evidential record when required.
Structures and buildings allowance
Entitlement Issue
The seller, a pension fund, had recently completed refurbishment works but had not prepared an allowance statement. Without the required statement, the buyer would have had no entitlement to claim structures and buildings allowances.
Transaction action
We reconstructed the seller’s expenditure from the available contracts, prepared the outstanding supporting schedules and collated the necessary details to support maintenance of a SBA claim.
Result
The Seller's SBA claim was completed to their tax teams and asset managers satisfaction with Allowances Statement for transfer to the buyer. A separate restricted valuation was carried out by us for the buyer for the qualifying fixtures.
Sale price: £19.5m
Qualifying fixtures: £2.4m
SBAs: £1.5m
Invalid section 198 election
Entitlement Issue
The seller's capital allowances claim failed to calculate the allowances for a large business park on property by property basis leaving the resultant s198 election insufficient in detail to satisfy statute or HMRC guidance leaving it exposed to rejection.
Transaction action
We reviewed the historical claims for the 20 properties included in the sale to arrive at a supportable basis for each of the assets that satisfied statute and the agreed contract position for the benefit of both parties.
Result
We prepared an election report with back-up evidence and 14 separate elections for the relevant properties with claims and disposal values. We co-ordinated joint s198 signature and submission.
Sale price: £40m
Qualifying fixtures: £5.4m
SBAs: £490k
Unclaimed qualifying fixtures
Entitlement Issue
The Seller was preparing a loss making asset for sale and had not claimed their full entitlement to capital allowances. The Seller wanted to market the property with capital allowances availability and avoid passing an automatic restriction to nil.
Transaction action
The historical refurbishment projects were collated and analysed with the necessary details to substantiate a robust capital allowances claim. An updated estimate was provided for marketing purposes and negotiated as part of the transaction.
Result
The seller go the deal it needed, secured a capital allowances report it could trust and both parties entered into a joint s198 election that they were happy with.
Sale Price: £20m
Qualifying fixtures: £3.5m
SBAs: Not Applicable
Different disposal issues require different solutions. In every case, the seller’s entitlement, supporting evidence and transaction documentation must align.