Tax breaks for Commercial Property Investment (BPRA)

Business Premises Renovation Allowance (BPRA) is a targeted and government-approved tax relief designed to help cut the cost of bringing unoccupied business property back into commercial use, and is available in designated “assisted areas”.

WHO CAN CLAIM?

It is potentially available to businesses, looking to buy or to lease commercial property in the designated areas.

It is also available to landlords, if they incur relevant expenditure in order to make unused property more attractive to potential tenants.

While the property needs to have been unused for at least a year before renovation work starts, it does NOT have to be owned or leased by you in that time – you can potentially buy or lease a property and start alterations immediately, so long as it was empty for at least a  year beforehand.

HOW DOES IT WORK?

It works as a “Super-Capital Allowance”, securing up to 100% immediate tax relief for the cost of renovating OR converting a pre-existing commercial property. It goes beyond ordinary Capital Allowances (available for fixtures, equipment, furniture and the like) also to relieve the cost of structural changes and improvements to the fabric of the existing building.

The Allowance does not have to be claimed in full straight away: a proportion can be disclaimed for use in later years if required. It is also available where a business wants to renovate only part of a larger property.

WHERE ARE THE “DESIGNATED AREAS”?

There are currently around 2,000 so-called “assisted areas” in England and Wales, including areas within:

  • Bolton, Burnley, Blackburn and Darwen,
  • Oldham and Rochdale
  • Wigan and St. Helens
  • Liverpool and Birmingham

A full list can be found at:   http://www.legislation.gov.uk/uksi/2007/107/pdfs/uksi_20070107_en.pdf

NOTES

  • The Allowance does not cover the cost of acquiring the land or building itself; nor extending an existing building, or developing adjacent land.
  • It is not available to certain trades, such as shipbuilding, the coal and steel industries, fisheries and aquaculture.
  • There are some grants which will potentially restrict the availability of BPRA – broadly those which also count as “State Aid”.

GET IN TOUCH If you think this relief could benefit you – partners@leonherman.co.uk