The super-deduction was first announced in March 2021, allowing for businesses who make investments in plant and machinery, to receive a 130% allowance deduction.
Property letting companies were not originally included in the scheme, meaning only occupiers could make a claim. However, amendments set out in the Finance Bill, mean that landlords now qualify for the super-deduction.
What the super-deduction offers
This change will allow for landlords to reduce their tax liability by up to 25p for every £1 spent on plant and machinery investments, which is significant for landlords as £1m of qualifying expenditure could save around £250,000 on their corporate tax bill.
Expenditure must be incurred on or after 1 April 2021 and before 1 April 2023. The super-deduction is not available where the plant and machinery were incurred before 3 March 2021.
The Head of Property and Construction at Old Mill stated ‘It means enhanced allowances will be available where a company purchases or constructs a building to let out and fits it out with fixtures and other assets which contribute to the functionality of the building.’
This tax saving will offer landlords an incentive to make additional investments and potentially bring forward planned investments, which will help encourage growth within the property sector.
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