SUMMARY

Business Premises Renovation Allowance Syndicates (BPRA) can provide you, as a professional customer, with the means to mitigate or substantially reduce your current year income tax liability through investment in the renovation and conversion of a business premises in a disadvantaged area.

Background

The Business Premises Renovation Allowance was introduced by Finance Act 2005 with a start date to be announced. BPRA is intended to give an incentive to bring derelict or unused properties back into use. BPRA gives an initial allowance of 100% for expenditure on converting or renovating unused business premises in a disadvantaged area. The start date is 11 April 2007 so expenditure must be incurred on or after 11 April 2007 to qualify for BPRA.

The scheme has a life of 5 years so expenditure must be incurred before 11 April 2012 to qualify.

How a BPRA Syndicate operates

Under current legislation 100% allowance is available for capital costs (Qualifying Expenditure) incurred on the conversion, renovation and repair of Qualifying Buildings in Designated Disadvantaged Areas for their subsequent use as Qualifying Business Premises. The allowance is a capital allowance, which may be used against income tax by individuals and against corporation tax by companies. The allowance is known as Business Premises Renovation Allowances and is defined in Part 3A Capital Allowances Act 2001 (CAA 2001). To the extent that capital allowances create or increase a person’s UK property business loss, they may be set off against a person’s general income (sideways loss relief).

The Syndicate must hold the Property for seven years from its first use as qualifying business premises or if not so used, the time when it is first suitable for letting, in order to avoid a balancing event.

Potential Investors should check with their professional advisors as to the suitability of any investments and the tax consequences for their personal situation. The interpretation and application of tax regulations can change and the most up to date position must be checked when considering the appropriateness of any investment.