Business Property Renovation Allowance as used by the rich and famous

Earlier this year there were a number of press articles such as

http://www.thisismoney.co.uk/money/celebritymoney/article-2083797/Wayne-Rooney-cuts-tax-investing-office-park.html

So what is BPRA and how does it work?

BPRA is a form of Government Aid given as a Tax Break in certain areas of the country for the renovation and reuse of commercial property.

You can purchase property for your own use or invest in a scheme with others.

Investors might in theory invest £100k but but scheme might borrow 75% leaving the investor to put in only 25%, but the investor will get 100% tax relief on the £100k (“initial allowance”).

BPRA will be available until March 2017 when its likely to be withdrawn, it could also be capped from 2014.

Its a complicated high risk investment and authorised advisors need to able to advise on unregulated collective investment schemes.

If you sell the investment within 7 years a tax charge will be triggered (“balancing charge”) effectively withdrawing the “initial allowance” this tax charge can also be triggered by death.

Income Tax on Profits and Capital Gains on sale will apply.

steve@bicknells.net

 

 

 

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