We know the correct legal documentation is essential for ensuring smooth commercial property transactions and securing valuable tax relief. Understanding the tax implications is crucial whether you’re an accountant advising clients or a solicitor drafting sale or purchase contracts. STax are Capital Allowance Experts who can support clients with a commercial legal pack and contract review.
What is a Commercial Property Legal Pack?
A Commercial Property Legal Pack is a comprehensive collection of key documents providing financial, legal, and structural insights into a commercial property. This pack plays a critical role in due diligence, helping buyers, sellers, and their advisors navigate potential tax savings through Capital Allowances.
The Capital Allowance Challenge
Could your client be missing out on unclaimed tax relief?
WE ARE THE CAPITAL ALLOWANCE EXPERTS
Capital Allowance legislation is complex, and overlooking key details can lead to missed opportunities. In some cases, incorrect handling of Capital Allowances could even expose advisors to legal risks.
At STax, our team of tax specialists ensures that every transaction is structured correctly, helping you and your clients maximise tax efficiency while staying fully compliant.
IS YOUR CLIENT SELLING A COMMERCIAL PROPERTY?
- Do you know what Section 32 of CPSE.1 requires?
- Have you completed Section 32 correctly? Leaving it blank or incomplete could cause issues down the line.
- Does your Purchase Contract include the right clauses to secure or transfer Capital Allowances? Standard templates often fail to cover this.
- Do you need a Section 198 Election? If so, is it valid and properly structured? Many are done incorrectly, leading to costly errors.
What is included?
ACTING FOR THE BUYER?
- CPSE.1 Review – We review the seller’s Section 32 responses, ensuring nothing is overlooked.
- Purchase Contract Support – We provide precise contract wording to protect the buyer’s entitlement to Capital Allowances.
- Section 198 Election – If required, we prepare a valid Section 198 Election, ensuring the buyer secures all available tax relief.
ACTING FOR THE SELLER?
- CPSE.1 Completion – Section 32 relates specifically to the Capital Allowances clarifying the seller’s position. We ensure Section 32 is correctly completed.
- Purchase Contract Clauses – We ensure the contract reflects your intended Capital Allowance position.
- Section 198 Election – We will supply a valid S198 Election and the required supporting documentation so legislation is satisfied and any remaining Capital Allowances pass to the seller.
A Section 198 Election, under the 2001 Act, is a document that establishes the Property Capital Allowance positions for Commercial Property transactions completed after April 2014. However, certain transactions are exempt from the new legislative changes and do not require a Section 198 Election. Although Section 198 Elections, as outlined in the Capital Allowances Act 2001, have been in use for many years, they are often misunderstood, improperly completed, and not fully utilised.
According to the CAA 2001, a Section 198 Election is the method by which the seller and buyer agree on the apportionment of capital allowances for fixtures and fittings in a property sale. It offers a straightforward way for both parties to meet the fixed value requirements of the CAA 2001, which have applied to sellers—regardless of whether they have previously claimed capital allowances—since April 2014.
S198 Elections must be completed within two years of the transaction completion date; otherwise, any available allowances will likely be permanently lost.
CPSE stands for Commercial Property Standard Enquiries. The CPSE is a standard set of pre-contract inquiries provided by the seller to the buyer in a commercial property transaction. It contains multiple sections designed to gather essential information from the seller about various aspects of the property and transaction.
In the CPSE, Section 33 specifically focuses on property Capital Allowances. This section aims to clarify the seller’s capital allowance position concerning embedded fixtures and fittings, excluding movable furniture and equipment.
EXPERT SUPPORT
Every step of the way!
At STax – The Capital Allowance Experts, we specialise in ensuring commercial property transactions are structured correctly to maximise tax efficiency. Our team of property tax specialists, surveyors, and accountants have helped clients secure over £500 million in unclaimed tax relief.