Fixtures and Fittings, and Fixtures – Property Sales

Fixtures and Fittings

Getting the terminology wrong on the different meanings of “fixtures” can cost you tax relief.

Buying or selling a property, either alone or as part of a business sale is a crucial time to consider tax relief on “capital allowances”. This is particularly so on “fixtures”.

There is no statutory tax definition of fixtures, so what does it mean? Actually, fixtures can apply to two different types of asset and they have different implications for tax – that can be a potential risk issue when it comes to making sure you are not giving away tax relief.

“Fixtures and fittings” are generally taken to mean moveable items, or chattels, such as chairs, cash registers, shelving.  The term is often used interchangeably with “plant and machinery”.  The other meaning of “fixtures” is building fixtures that form part of a building such as air conditioning, lifts, plumbing and heating.

Getting them mixed up can cost you tax.  Different tax rules apply to the different types of fixtures when buying and selling them.  A party to a commercial property transaction will have to complete the “CPSE”, or Commercial Property Standard Enquiries, on capital allowance which covers the building fixtures but not the chattels. CPSEs are a vital time for a buyer, or even a seller who realises they have not yet made a claim, to consider their capital allowances on the building.

Just one party misinterpreting that the CPSE replies refer to chattels rather than building fixtures is a good way of one party missing out on tax relief. Careless talk costs… tax.

Special tax rules cover building fixtures passing to the purchaser.  There is more flexibility on chattels, but care must be taken in both cases.  Buying or selling a property, or a business, is a time to take experienced tax advice on what your options are.

For further advice, please contact our tax team at hello@garbutt-elliott.co.uk – 01904 464 100. Or fill in our contact form below: