In May 2012, HM Treasury released its consultation paper relating to the “enveloping” of high value residential property.
Much has been written about it already, so I won’t bore with another summary – but it made me want to revisit what had resulted from a previous consultation issued in May 2011. If you missed that one, it was entitled “Consultation on the removal of 36 tax reliefs” – I can’t deny that the title is snappy and to the point.
Using the Government’s words, that consultation was issued so as “to simplify the tax system through the removal of reliefs”.
So let’s pick one of the 36 at random – Flat Conversion Allowances – and see what happened to that relief?
Well, no prizes for guessing that in December 2011, Flat Conversion Allowances (sometimes called Flats Above Shops relief) were repealed and they will be withdrawn for expenditure incurred after March 2013.
It strikes me as odd, that when there is a shortage of affordable property in parts of the UK, and when the smaller end of the construction industry is on its knees, the relief is repealed. Or, perhaps there is greater wisdom involved in that by giving advance notice of the repeal, it will accelerate property owners’ decisions to convert and give a much needed boost to the construction sector (I’ll leave the funding issues as a matter for another day!)
All I know is that anyone thinking about converting under-used space above commercial premises may want to revisit this relief and reconsider the timing of their plans if they want to claim the currently available 100% capital allowances.
The information in this article was correct at the date it was first published.
However it is of a generic nature and cannot constitute advice. Specific advice should be sought before any action taken.
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