Hotel transactions are among one of the more complex Capital Allowance claims within the commercial property sector. With their unique blend of commercial, residential, and leisure spaces, hotels feature a vast range of qualifying assets that can generate substantial tax savings—if correctly identified, valued and claimed by experts.
However, without accurate and expert guidance, these opportunities are often missed, leading to consequential in the form of tax relief. The importance of engaging with specialists who understand the intricate details of hotel transactions is critical in ensuring that every tax-planning opportunity is fully realised.
“The Capital Allowances available within hotel properties can offer substantial tax savings, but they are frequently underutilised due to a lack of accurate advice. Ensuring all qualifying expenditures are identified is crucial to avoid leaving money on the table.”
Andy Milnes, Sales Director at HMA Tax
Why Accurate Advice Matters in Hotel Transactions
Hotels are unique in their makeup, with a mix of commercial and residential spaces, often including a wide range of fixtures, fittings, and plant equipment. Each of these can qualify for Capital Allowances, but recognising which items are eligible, and navigating the legislation governing them, is complex. Getting accurate advice early, especially if the property is being purchased or sold is essential.
Peter Seymour from Graham & Sibbald points out: “The intricacies involved in hotel transactions are vast, and that’s why getting the right advice from the leading Capital Allowance specialists is vital. HMA Tax’s understanding of how to maximise capital allowances can make a huge difference to the financial outcome of a deal.”
Case Study: Hotel in Manchester – A £750,000 Tax Relief Achievement
A recent transaction in Manchester serves as a clear example of how accurate Capital Allowances advice can yield significant tax relief and benefits. HMA Tax was recently engaged to assess a four-star hotel located in central Manchester, where the new owners were unaware of the substantial Capital Allowances embedded within the property.
Through a thorough review of the hotel’s fixtures, fittings, and integral features, our surveying and tax specialist team identified over £3 million in qualifying expenditure, leading to £750,000 in ongoing tax relief claim.
This included allowances on essential plant and machinery, air conditioning systems, and even certain decorative elements. Without specialist advice, this opportunity would have been missed and the tax relief may have never been realised. This is unfortunately the norm for more than 25% of commercial property owners across the UK.
Insights from the Manchester Breakfast Event
The importance of accurate Capital Allowances claims was a key topic at a breakfast hosted by Graham & Sibbald on the Monday, 30th September. The event highlighted how many hotels often overlooked for Capital Allowances as a means of significant tax relief and present significant opportunities for proactive tax planning when identified, valued and caled correctly.
During the session, the discussion centred around the increasing complexity of property transactions in the current economic climate. With rising interest rates and a downturn in commercial real estate values…
Estimate Your Claim
Capital Allowances still remain as one of the most significant tax relief mechanisms available to commercial property owners.
Andy Milnes shared his own feelings on that matter, addressing how many commercial property owners, with even the most robust property portfolios still manage overlook the benefits of Capital Allowances.
Accurate Capital Allowances advice can serve as a safeguard, ensuring that every element of the property’s potential tax relief is maximised. As hotels regularly undergo refurbishment or expansion, understanding which investments qualify for tax relief can help owners recoup costs more effectively. This point was reinforced by the broader HMA Tax’s team, who shared several case studies where substantial tax savings were achieved for hotel owners.
As the breakfast session revealed, a proactive approach to Capital Allowances can not only enhance a hotel’s bottom line but also ensure compliance and financial clarity for future transactions.
