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Ashton & Carrington
Capital Allowances · Holiday let

£198,625 of allowances, hidden in a holiday let.

How the purchase of a coastal cottage became a six-figure claim, and why FHL owners have a closing window for pre-abolition years.

£198,625
Qualifying plant & machinery
35.0%
Share of purchase price
up to £89,381
Potential tax saved

The engagement

A couple letting a stone cottage as a qualifying furnished holiday let bought it for £550,000. It had been a private home, so the vendor had no entitlement and no prior claim existed. As first qualifying owners, the full embedded plant was theirs to claim.

Our approach

  • Entitlement established: UK furnished holiday letting, CAA 2001 s.15(1)(c), pre-abolition periods
  • Desktop analysis plus a single site survey
  • Reconstruction costs from BCIS (RICS) and Spon's data; land value to VOA benchmarks
  • Apportioned to HMRC's formula under CAA 2001 s.562
  • Filing-ready report with statutory basis and pool allocation

The result

Main rate pool
£83,400
Special rate pool
£115,225
Total qualifying plant & machinery
£198,625

HMRC's apportionment formula

Q = P × A ÷ (B + C)

Q qualifying expenditure · P purchase expenditure · A reconstruction value of plant · B reconstruction value of building · C bare site value.

What that's worth in tax

Basic rate, 20%
£39,725
Higher rate, 40%
£79,450
Additional rate, 45%
£89,381

Relief is given through writing-down allowances over time; where the Annual Investment Allowance or full expensing applies, much of the benefit can land in year one.

A real client engagement, anonymised to protect confidentiality. Figures do not constitute tax advice; outcomes depend on individual circumstances.

More than £1 in every £3 the clients paid for the cottage qualified. The vendor couldn't claim it. The clients nearly didn't either.

More outcomes

Related case studies.

Real client engagements, anonymised to protect confidentiality. Figures do not constitute tax advice; outcomes depend on individual circumstances.

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