Apportionment of Sale Price for Capital Allowance Purposes

Posted on December 2, 2011 by admin| Leave a comment

In certain circumstances one sale price will have to be apportioned between distinct assets that are covered under one sale contract with a common price. For example:
? You might sell land with an attached asset that is eligible for capital allowance claims. In such a case, the price attributable to the attached asset needs to be clear to enable claiming capital allowances for that asset.
? You might sell plant and machinery items that belong to different asset pools and hence need to be accounted separately

The general rule is that the apportionment should be done in a just and reasonable manner. However, the seller and buyer have opposing pulls in fixing the price of assets that are eligible for capital allowances.

The buyer would like to see it fixed at a high value so that the person can claim maximum capital allowances. The seller, on the other hand, would like to apportion a low value to the asset so that there will be no surplus over the written down value (original expenditure minus capital allowances claimed so far).

Where an asset is sold at a price over the written down value, tax authorities will consider excessive capital allowances to have been given and add back the excess to current taxable income. The taxpayer will thus be forced to bear additional tax burden.

Because the buyer and seller have to use the same apportionment, a negotiation process usually follows. However, if the result of the negotiation appears to be designed to avoid tax with no reasonable basis, tax authorities might not accept the apportionment. Instead, they might open an enquiry in consultation with the concerned District Valuer.

Where buyer and seller has not entered into any agreement for apportionment of the sale price, the buyer can do the apportionment in consultation with the District Valuer.

The price apportioned to the asset eligible for capital allowances cannot exceed:
? The amount on which the seller could have claimed capital allowances
? The total sale price

Provided that the sale contract has been made at “arm’s length” leading to the assumption that is has not been fixed to avoid tax, and the above provisions have been followed, apportionment of the sale price will not normally be rejected.

Similar provisions apply in the case of a lease transaction with the lessee paying a premium and using the asset for a qualifying activity.

For more information visit the authors siteSelling Pensions or Sell Pensions

Posted in Marketing

Tagged , ,

Capital Allowance Allows You to Write off the Cost of Long Life Assets

Posted on December 2, 2011 by admin| Leave a comment

Capital allowance replaced the “wear and tear” allowance that was allowed originally. The term “wear and tear” probably expresses the idea behind the allowance better. What capital allowance does is to allow you to write off the cost of long-life assets over their useful lives.

For non-accountants, the distinction between ordinary expenses (such as raw material purchases) and expenditure on long-life assets (such as plant and machinery) might appear a little confusing. Both are business expenses and yet one of them is allowed to be deducted from current year’s income while the other is not.

The reason for the different treatment is that while the raw material is typically consumed in the year of purchase, the asset is used over a number of years. Hence, the cost of the latter is spread over these years of useful life. Each year, you can deduct a percentage of the value of the asset so that the full value (minus any scrap value at the end of the period) is written off by the time the asset needs to be replaced.

It is this yearly percentage that we call capital allowance (or wear and tear allowance). In most countries, this write-off is called depreciation while in UK it is called capital allowance.

Capital allowance as outlined above is comparatively easy to understand and even to compute. However, the computation becomes extremely complicated when the asset is a building. A building as such is considered to be an asset with an “indefinite” life and no capital allowance is allowed on buildings.

However, certain fixtures of the building such as air conditioners, lifts and many others are considered “plant and machinery” and capital allowances can be claimed on these. The problem is that it is difficult to value these fixtures separately when you purchase a building with all the fixtures included. Tax authorities do not take kindly to any over-valuation of the fixtures while under-valuation means that you will get tax reductions less than what you are entitled to.

For claiming capital allowances on property, you need more than accounting and taxation expertise. You also need valuation expertise to ensure that the fixtures of the building are valued correctly. Portal Tax Claims LLP works with your accountants and tax consultants to ensure that you get the full benefits you are entitled to.

For more information visit the authors site Private Pension or Private Pensions

Posted in Marketing

Tagged , , , ,

Business Premises Renovation Allowance

Posted on December 2, 2011 by admin| Leave a comment

Business Premises Renovation Allowance (BPRA) is a tax allowance provided by HMRC in UK to provide an incentive to renovate derelict or unused properties and bring them back into use. Provided the business premises thus converted or renovated is in a disadvantaged area, 100% of the qualifying expenditure can be claimed as capital allowance. BPRA will be in effect only for a period of five years from April 11, 2007 to April 10, 2012 and the expenditure must be incurred during this period.

A disadvantaged area is any area included in The Assisted Areas Order 2007 or Northern Ireland. Areas such as North Cornwall and Isles of Scilly in England and Swansea and Pembrokeshire in Wales are included in the 2007 order. Just enter the area’s postcode at Postcode Database of Assisted Areas website to check whether it qualifies.

To qualify for BPRA, the expenditure must be incurred:
? To convert or renovate a commercial building or structure situated in a disadvantaged area into a “qualifying” business premises
? To repair qualifying business premises
? Specifically in order to claim BPRA

Qualifying business premises are commercial buildings that are presently unused and have not been used during one year preceding the incurrence of the expenditure. The last use must also not have been as a dwelling. Expenditure for conversion, renovation and repairs of such a building will qualify for BPRA provided it is used or let out for a “relevant trade,” i.e. for:
? Fisheries and aquaculture,
? Shipbuilding,
? Coal industry,
? Steel industry,
? Synthetic fibres,
? Primary production of certain agricultural products, and
? Manufacture or marketing of products which imitate or substitute for milk and milk products.

Any expenditure for acquiring land, extending the building or developing land next to the building does not qualify, however.

For more information visit the authors site Private Pension or Private Pensions

Posted in Marketing

Tagged , , ,

Capital Allowance Claims and Property Sales

Posted on December 2, 2011 by admin| Leave a comment

If you are a property owner who has claimed capital allowances, you should carefully review the possibilities and arrange things in a manner to retain the tax savings you had received from the capital allowance claims. If you have not claimed capital allowances, but could have claimed it under relevant rules, you could explore the possibility of passing on the claims to the buyer and negotiating a higher price.

Capital allowances are claimed on the fixtures that form part of the building at rates applicable to plant and machinery. To make the claim, the value of these fixtures should be determined in a manner acceptable to HM Revenue. This can be done in different ways depending on the context.

If the seller has claimed capital allowances, the person can indicate the disposal value of the fixtures in the sale contract. This can be through an Election Notice under section 198 of the Capital Allowances Act 2001 or by a fair apportionment of the sale price under section 196. The price of fixtures so apportioned cannot exceed the cost of the fixtures to the seller.

Claiming capital allowances results in the value of the fixtures being “written down” for tax purposes. If the disposal price of fixtures on a sale as above exceeds the “tax written down value,” then the seller will be liable to make good the excess allowance the person has claimed through a “balancing change.” This will result in paying additional tax over and above the tax on income that year.

By opting for a different way of apportioning the disposal value of fixtures, sellers can avoid balancing charges and the additional taxes. Such a different apportionment is possible by electing to show the disposal value of the fixtures at a low figure that is either equal to the tax written down value or lower.

However, a low disposal value for the fixtures will mean lower capital allowance claims and consequent tax relief for the buyer. It is in this context that the buyer might be willing to pay a higher price for the property in return for a higher disposal value.

For more information visit the authors site Private Pension or Private Pensions

Posted in Marketing

Tagged , ,

Capital Allowance Claims and Tax on Furnished Holiday Lets

Posted on December 2, 2011 by admin| Leave a comment

If you are a person who owns furnished holiday lets in UK or Euro zone, you can reduce the tax you pay not only on the rents of property but also on the salaries and dividends you receive in UK. The savings can be substantial and can help cope with low exchange rates and weak occupancy rates. While there is no time limit for claiming tax allowances, there is a possibility that the government might change the law and you might lose the claim unless you act fast.

It is estimated that an amazing 96% of holiday home owners are unaware of the capital allowance claims they are entitled to. This happens because of the complex rules regarding capital allowance claims on property. While you claim capital allowance from your taxable income on the full price of the asset in the case of furniture, computer systems and vehicles, the situation is very different in the case of property.

The price you paid for property has to be split into “First Fix” and “Second Fix” elements and allowances can be claimed only on the Second Fix items. And the valuation of second fix items cannot be based on guesswork; if you put an excessive value on these, HMRC might impose penalties for a wrongful claim; if you put too low a value, you lose a legitimate claim. Hence you need a tax expert who is also a valuation expert to help you with capital allowance claims on property.

Unless your accountant has acquired special expertise in property valuation, it is most likely that you have substantial unclaimed amounts. We can work with your accountant and help you claim what you are eligible for. And it can mean thousands of pounds in tax savings.

At least two million tax payers in UK are likely to own holiday homes either in UK or overseas. If the holiday homes are furnished and located in the UK or Euro zone, your property might qualify as Furnished Holiday Let. Eligibility also depends on whether the property was available for holiday letting at least for 140 days (and was let out at market rates for 70 days).

If your property qualifies, your capital allowance claims could even enable you ask for refunds of tax paid in the past. You can also carry forward the claims to future years. Considering that the amounts involved are likely to be in thousands of dollars, it would be a pity if it is left unclaimed.

Supplement your accountant’s expertise with ours and we would most likely be able to find unclaimed capital allowances, and consequent excess tax payments, worth thousands of dollars for owners of furnished holiday lets or FHLs. This expectation is based on our solid experience in the past.

If you had constructed the house yourself, you might have an idea of how much the Second Fix items such as air conditioning, kitchen fixtures and fittings, and numerous others, cost. However, as is more likely, if bought the property as a whole, how will you identify and estimate all the varied fixtures that are eligible for capital allowances?

It is also not a simple question of valuation. Some items, such as electrical and water supply systems, might include both First Fix and Second Fix components. Only a valuation expert, who is also a capital allowances and tax expert, can help you make a sustainable claim.

For more information visit the authors site Private Pensions or Private Pension

Posted in Marketing

Tagged , , ,

Capital Allowance Claims for Partnerships

Posted on December 2, 2011 by admin| Leave a comment

To understand the significance of claiming capital allowance on partnership property, it is helpful to understand the different tax treatments of income from partnerships and joint ownerships.

Partnership profits are treated, well, as the profits of the “partnership,” a tax entity on its own. These profits are taxed according to rules applicable for taxing the income of partnerships.

Income from jointly owned assets is taxed at the level of individuals who receive the income from the assets. Each recipient is taxed separately on the share of income that person received, according to rules applicable for taxing individuals.

Tax authorities determine whether a partnership exists or not before deciding how to tax the income. If a partnership exists, then the income from the assets owned by the partnership is taxed separately from the incomes of the individual partners. Even if a partner has to share in the losses suffered by a partnership that loss cannot be set off against his or her personal income to reduce tax, for example.

Similar rules apply for capital allowance claims. A partnership can claim capital allowance on its property if the property can be shown to belong to the partnership, rather than being jointly owned by two or more individuals. A property is considered as partnership property if:
? The partnership has been registered with HM Revenue & Customs
? The property has been purchased in the name of the partnership and appears in its accounts
? The property and related expenses have been paid through the partnership’s bank account

If your partnership owns a building used in a business, it is quite likely that you have not claimed the capital allowances the business is entitled to. This happens because of the complexity of capital allowance rules for buildings. Unlike other assets, you cannot claim capital allowance on the full value of the asset; you have to value the “second fix” components of the building and claim capital allowance on this value alone.

Unless you are a valuation expert, it is almost impossible to identify and value these items which typically appear as an integral part of the building. The problem is further complicated by the fact that if the value and consequent claim are excessive, tax authorities can penalize you. You need a specialist who is expert in both taxation and valuation to help you claim the right amounts.

As there is no time limit for claiming capital allowances, the partnership might be able to save large amounts of tax for a property purchased several years ago.

For more information visit the authors site Private Pensions or Private Pension

Posted in Marketing

Tagged , , , ,

Derbyshire Holiday Cottages

Posted on December 2, 2011 by admin| Leave a comment

Holiday cottages in scenic and historic locations help us get away briefly from the humdrum and stress of everyday routines. Few things can recharge us as refreshingly as a holiday trip to the hills and parks, and to cottages that remind us of a bygone era when life was a quiet flow. And visits to ancient castles and manors and halls can make us wonder about the lives of kings and dukes and other lordships.

Derbyshire has its share of these great attractions including:
? A tram village that serves as the National Tramway Museum where you can get leisurely tram rides to your heart’s content,
? The Masson Mills where you can observe how people spun yarn and made clothes in the olden days with traditional textile machinery,
? The Chatsworth House located on an expansive parkland between the River Derwent and the low hills lying between Derwent and Wye valleys and
? A medieval 11th century castle from where the lordship of Peak administered his territory.

Paddock House Farm Holiday Cottages located in the Peak District National Park in Derbyshire has six luxury holiday cottages for visitors eager to enjoy the above and other attractions. All are self-catering accommodation with fully equipped kitchens, a dining table and outside BBQ. The cottages are located amidst gardens and grassland on a 35-acre ground with tree-lined drives.

A small group of two can book the one-bedroom Cherry Holiday Cottage that features a large master bedroom, open plan kitchen lounge and dining area with a fully equipped kitchen, and comfortable furniture. A large group of 35 can book all the six cottages, some of which have their own gardens with patio, picnic table and barbeque in addition to up to three bedrooms, and great living and self-catering facilities.

These Peak District holiday cottages can provide you a great unwinding experience.

For more information please contact the authors website. Pension Advice or Annuity

Posted in Marketing

Tagged , , , ,

What do you look for in a Self-Catering Cottage?

Posted on December 2, 2011 by admin| Leave a comment

When you go sightseeing, you have the option to choose a hotel or B&B to stay. Why should you choose a self catering cottage instead? And what should you look for when you select self-catering holiday cottages?

One point in favour of self catering accommodation is that you are more likely to be allowed to bring your dog along. Dogs are typically not allowed in hotels and B&B’s and that means you will have to make elaborate arrangements to get your dog attended during your absence.

Then there is the issue of cost. Eating in a hotel is typically expensive while selfcatering allows you to buy groceries comparatively inexpensively from a local store and do your own cooking. Self catering facilities typically come not only with stoves and ovens but also with cooking and serving utensils and eating tables. Some might even offer BBQ and picnic benches in an outside garden.

Self catering cottages also offer more freedom and space. You are not confined to a room as in a hotel or B&B and can move around just as you do in your own home.
Self Catering Cottage Facilities

The number of bedrooms and beds differ from cottage to cottage. The Paddock House Farm Holiday Cottages in the Peak District National Park (the second most-visited national park in the world) offer one-bedroom, two-bedroom and three-bedroom cottages accommodating 2 to 8 persons per cottage. The cottages are spread around a 35-acre ground with 5 acres of gardens and grassland.

All the cottages are self catering and have kitchens featuring electric hob and cooker, dishwasher, fully fitted cupboards and plenty of cutlery and crockery. A dining table is also included. Outside BBQ and separate picnic areas with picnic benches are also available.

Bedrooms are equipped with standard size double or single beds, chest of drawers and wardrobes, while the living area has sofa bed, TV/DVD, satellite programs and video. Main bathrooms with showers, wash basins and WC complete the accommodation.

The self catering cottage is indeed a home away from home.

For more information please contact the authors website.Pension Advice or Annuity

Posted in Marketing

Tagged , , ,

David Stanley Redfern is au Courant on Search Marketing Scenario

Posted on December 2, 2011 by admin| Leave a comment

Search engines, particularly Google which accounts for most search traffic, changes the way they rank Web pages and sites. Such “algorithm changes” are done to better deliver quality search results to the search engine users. At each algorithm change, websites could find their search engine visibility going down (or up).

The most recent Google update, the so-called Farmer’s update, saw many well known sites losing a great deal of their search engine visibility. It requires an expert who keeps a close watch on current developments to help you adapt to the changes and ensure that your website does not jump up and down at every algorithm change.

David Stanley Redfern has been in search engine marketing field for over ten years now. He has seen algorithm changes and their impact on web traffic of his client’s websites. More importantly, he has taken the pains to understand what is going on and keep himself au courant on the changing scenario.

David Stanley Redfern has engineered over a hundred site optimization strategies to improve not only traffic to the website but also conversion of visitors into paying customers. He has helped his clients improve conversions through enhanced site usability, squeeze page optimization, multimedia production and shopping cart story-boarding. The techniques he used have been tested by third parties such as Marketing Sherpa, Marketing Experiments and Randfish (SEO Moz).

Google Analytics is a key tool to check what is happening at your site (and why). You can get a great deal of insights about the impact of the changes you make to your website if you know how to use Google Analytics meaningfully. It is here that David Stanley Redfern scores high, with his demonstrated expertise to identify negative keyword candidates through the use of search query analysis filters.

The range of search marketing services provided by David Stanley Redfern includes:
? Landing page design and testing
? Google Web Optimizer testing
? Google Local
? Contextual advertising
? Banner advertising
? Retargeting

David Stanley Redfern’s clients include law firms, enterprise software developers, e-commerce companies, real estate developers and agents, medical and dental practices and educational institutions.

David Stanley Redfern provides a full portfolio of Web marketing services to help his clients achieve sustained results:
? Getting a clear idea of customer requirements and current situation
? Reviewing existing Web marketing campaigns being executed by the customer and how they are aligned to currently effective practices
? Reviewing sales copy and landing page content to evaluate how effectively they communicate the sales message
? Evaluating customer’s website for usability and other factors that affect conversions
? Creating a complete Web marketing strategy and helping the customer to execute it
? Monitoring the results of the marketing strategy and suggesting changes for greater impact

Your Web marketing efforts could produce surprising results by a change in certain key areas. Call David Stanley Redfern for a free discussion and consultation.

For more information please contact the authors website. Pension Advice or Annuity

Posted in Marketing

Tagged , , ,

The Canonical URL tag Helps when Duplicate Content Exists

Posted on December 2, 2011 by admin| Leave a comment

It is common for a website to contain the same content on multiple pages. For example, an e-commerce site might display the same product information on multiple pages sorted by price, or in alphabetical order or in no order. Of these, the main page might be the product page that is not sorted in any way.

In a case such as the above, the unsorted product page might be considered the “canonical” page and its URL the canonical URL. To tell search engines that this is the page that they should treat as the real page, the canonical tag is inserted into the head section of the non-canonical pages. The tag would look as below:

The canonical tag will tell search engines to pass on all “page rank” factors on the non-canonical pages to the specified canonical page. In this way, you can enhance the importance of the main page in the eyes of search engines and also avoid any duplicate content problems. Essentially what happens is that the search engine might index only the canonical URL (only might, because they treat the tag as only a “hint” and not a “directive.”)

The existence of duplicate pages can dilute the page rank of each of these pages. With a canonical tag, you can tell search engines to pass on all the value to a single page and hope that the page rank of this page will go up as a result. This is particularly useful when you have pages like a printer friendly page that you do not want to get any page rank.

Until the arrival of the canonical URL (now recognized by Google, Yahoo and Bing), the problem of duplicate content was sought to be solved by using “noindex” tags and 301 redirects.

For more information please contact the authors website. Pension Advice or Annuity

Posted in Marketing

Tagged , , ,