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Capital allowances and contract clauses: a case study guide

Paul Farey (AECOM) looks at the problems that can arise when the issue of capital allowances is not properly dealt with in property contracts. 

Even before the changes that were made to the rules for claiming capital allowances on fixtures which were introduced in FA 2012 it was not advisable to blindly adopt a standard approach to capital allowances without considering all the relevant facts. However it was commonly acknowledged that buyers would benefit if no capital allowances claim was made by the seller or where the seller had made a claim the buyer should resist any agreement as to the value of fixtures until after the property transaction had been finalised. Of course a seller who had claimed capital allowances would have been well advised to agree the value of fixtures in the contract at a nominal value. These considerations gave rise to...

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