Prior to April 2011, Agricultural Building Allowances were available on the cost of an agricultural building, allowing a tax deduction for the cost of the building over a number of years.
Following the abolition of the scheme, however, there is no general relief for the cost of the actual building. Separating the expenditure of the component parts of the building may provide a resolution.
It may be possible to claim 'capital allowances' when you buy qualifying assets for use in your business, such as: equipment; machinery; IT systems or business vehicles. These come under the umbrella term of 'plant and machinery'. Certain expenditure incurred on buildings is explicitly excluded from the capital allowances legislation.
Identifying individual features such as water/electrical systems and ventilation, which represent a vast share of the costs in agricultural development, can ensure that the maximum tax relief available to you is acquired, although care needs to be taken when determining allowable expenditure.
Tax relief is given via a writing down allowance which is determined by the asset acquired and the expected useful life of the asset.
Provided the criteria are met, any capital expenditure may be relieved for tax purposes under the Annual Investment Allowance rules.
This is not legal advice; it is intended to provide information of general interest about current legal issues.
If you have any questions on this article, or require advice on any aspect of taxation and/or agricultural matters please contact Marc Dorsett on either 01245 493939 or dorsettm@gepp.co.uk
