Consultancy urges Welsh firms to use storage space.
PROPERTY consultancy Bruton Knowles is encouraging Welsh businesses to tap into the potential of redundant storage or back office space sitting above commercial premises.
Businesses have six months left to make use of a little-publicised tax break designed to encourage them to convert redundant space into residential letting space in towns and city centres.
Introduced in 2001, Flat Conversion Allowances (FCAs) were designed to increase the availability of affordable rental accommodation in urban areas, by encouraging the conversion of this empty or under-used space to residential use. It gives a 100% capital allowance on the cost of the conversion works, during the years of expenditure, provided the building pre-dates 1980, the conversion space has been unoccupied for at least one year, and that the accommodation will be available for short term letting.
Richard Frost, chartered surveyor and partner at Bruton Knowles Cardiff said the allowance was worth exploiting.
"In my work managing building projects it surprises me how many buildings still have redundant space, sitting above shops and commercial premises, which is largely unused or used only for occasional storage," he said.
"There is real scope to make much more of a return from these spaces, by looking into the potential for residential conversion.
The Flat Conversion Allowances enable the property owner to claim in respect of conversion costs, renovation costs, associated repair costs and any cost of providing access, as long as the building meets the qualifying criteria.
"Businesses considering claiming the allowance have six months left in which to do so, as the government has repealed FCAs in the 2012 Finance Bill in respect of expenditure incurred on or after April 1, 2013. This was done as part of their tax simplification process, which justified the removal of reliefs that they claim have had poor take up, though lack of awareness is more likely to be the problem. In balance, other property related tax allowances have been extended, including the Business Premises Renovation allowance, which provides 100% relief on the expenditure of renovating or converting a qualifying building into qualifying business premises. The allowance was due to end on 10 April this year, but has been extended to 2017.
"In a tough economic climate it is important for businesses to look at whatever property assets they have and ensure they are making the most of them, as well as benefiting from whatever tax reliefs and allowances that they can."
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|Publication:||Western Mail (Cardiff, Wales)|
|Date:||Oct 17, 2012|
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