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Case study 2 | Residential Care Home
Opportunity
Our client acquired a care home four years earlier.
Contract apportioned as follows:
Freehold land and buildings: £500,000
Goodwill: £100,000
Chattels, loose fixtures and fittings: £100,000
The client’s accountant had already claimed for the £100,000 of chattels. We advised the client to explore the opportunity to claim the capital allowances on the fixed machinery or plant within the freehold land and buildings apportionment.
Solution
An initial report and proposal was produced detailing the issues to be considered, estimate of capital allowances, tax saving and our professional fees. Following appointment £100,000 of capital allowances were identified from our site visit and detailed analysis.
Saving
£10,000
First year tax saving at 40% higher rate income tax.
£40,000
Total lifetime tax saving at 40% higher rate income tax.
Professional fees less than 50% of first year tax saving.