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BUSINESS
PREMISES RENOVATION ALLOWANCE
At last
the Business Premises Renovation Allowance has arrived
for some! From 11th April
2007 this allowance means you can set 100% of the renovation
cost of a building off against your taxable income. This
allowance does not cover the capital costs of the building
but only its renovation. In order to qualify the building
needs to be in a designated area and have been empty for
at least 12 months and must be non-residential. The intention
of the scheme is to regenerate designated areas and generate
employment. If you don’t claim the full 100% in the
first year an allowance of 25% of costs will be available
until you have had the full tax relief.
Once developed you can rent
the premises out or occupy them for the purposes for a trade,
but any disposal within 7 years of the conversion will produce
a balancing adjustment likely to claw back some or all of
the allowances given.
The allowance is available on
qualifying Capital Expenditure incurred in connection with:
- the conversion of the qualifying building into qualifying
business premises or the renovation of the qualifying
building, if it is, or
- will be qualifying business premise or repairs which
would usually be classed as Capital Expenditure to a
qualifying building to the extent that the repairs are
incidental to the renovation or conversion of the qualifying
building.
The designated development areas
where this allowance will apply are set out in the assisted
areas Order SI2007/107. There are Tier 1 and Tier 2 areas.
This allowance is likely to
be of great assistance to farmers and landowners who are
considering developing qualifying buildings and then letting
them out for an employment use as a diversification project
or to produce an alternative source of income.
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