Skip to content
Exterior view of a florist's shop

Do you rent out a commercial property?

Yes? Owning a commercial rental property in the UK can be a profitable venture, especially when you leverage the available tax benefits. Capital Allowances can play a pivotal role in maximising your returns by providing tax relief on certain expenditures. For commercial rental owners, understanding these benefits can lead to substantial savings and improved profitability.

What is a commercial rental property?

The government is mean. It divides rental property into residential and commercial. There is NO Capital Allowances tax relief on residential properties but … H.M.O.s are treated as commercial properties for some types tax relief and, of course, H.M.O.s can include whole blocks of flats and student accommodation as well as the traditional interpretation of a Home of Multiple Occupation.  Confused?  Give me a call and we can talk it through.

How can I benefit?

Capital Allowances on commercial rental properties can mitigate tax liabilities and improve cash flows in several ways:

Offset taxable income

By claiming Capital Allowances, you can offset the cost of qualifying items against your taxable profits, effectively lowering your corporation/income tax bill.

Refresh and refurbish

If you’re renovating your rental property ahead of a new tenant, Capital Allowances allow you to deduct these costs from your taxable profits, making improvements more financially viable.

Sustain cash flow

With reduced tax obligations, you have better cash flow management, ensuring you have the funds needed for maintenance, marketing, or further property investments.

Long-term gain

While the immediate tax relief is beneficial, Capital Allowances also provide long-term gains by gradually reducing taxable income over the years as you continue to claim on qualifying items.

Is there tax relief available?

Absolutely! In the UK, tax relief through Capital Allowances is indeed available for short-term rental property owners on various expenditures.

Plant and Machinery Allowances (PMAs)

You can claim on fixtures within the property, such as furniture, equipment, and certain fittings, under the plant and machinery allowance.

Integral features

For integral features of a building like heating systems, air conditioning, and electrical systems, you can claim a Writing Down Allowance (WDA) at a set rate per year.

Annual Investment Allowance (AIA)

The AIA allows you to claim up to 100% of the cost in the year of purchase or refurbishment for qualifying items, subject to an annual limit.

Energy-efficient technology

Investing in green technology can also offer tax benefits. Enhanced Capital Allowances are available for certain energy-efficient products, allowing you to claim 100% of the cost in the first year.

Chat with us today in a free, no-commitment assessment to ensure you can fully benefit from capital allowances for your commercial rental property.

Contact us

Get the tax relief you are entitled to

If you need the help of a tax consultant to identify what tax relief you are eligible for on your commercial property, contact us today to have a no obligation chat.

We’ll do our best to call when it’s convenient for you.

Case study

A customer success story

The Stag at Mentmore

Restaurant renovation

The Stag at Mentmore Ltd was a restaurant renovation. They were able to claim £124k after investing £233k in the development.

Read more

I would absolutely recommend Paul. I was very happy with the outcome. Paul was very thorough throughout the process and did a great job. My only regret is not getting him involved sooner!

Nick Walters
The Stag at Mentmore Ltd