Fixtures and fitting on transfer of ownership

The tax treatment of the sale of fixtures and fittings included in the sale or purchase of a commercial building changed from April 2014. From that date, the buyer of a building that contains fixtures can only claim plant and machinery allowances (PMA) if the expenditure on the fixtures is pooled before the sale.

The seller and buyer must also either:

  • formally agree a value for fixtures within 2 years of a transfer
  • start formal proceedings to agree the value within that time

The formal agreement to satisfy the fixed value requirement is usually achieved when the buyer and the seller make a valid tax election known as a Section 198 claim.

This election effectively binds both the seller and purchaser of a commercial property to an agreed valuation for fixtures and fittings included in the sale. The election is irrevocable and cannot be subsequently changed.

There is a lower Writing Down Allowances (WDA) rate of 8% available for certain long life assets and integral features. A standard 18% WDA is available for fixtures and fittings that do not qualify for the lower 8% rate.

Posted in Capital allowances

Exeter Accountant MJ Smith & Co

Celebrating 25 years of excellence.

Free 1st Meeting
Fixed Fees
Free Support!

Find out more

Client Portal Login

Forgot Password?

Latest News

Tax if clients leave the UK to live abroad

The P85 form should be completed by individuals or their agents to advise HMRC that have left the UK to …
Read More

Remaining age related tax allowances

Most age related tax allowances have been phased out. However, the Married Couple’s Allowance (MCA) is available to elderly married …
Read More

Carry back charitable contributions

Donations to charity over the course of a tax year can add up and taxpayers must ensure they keep a …
Read More

Twitter Feed