Capital allowances on a leased fit-out

Capital allowances attach to the person who incurred the expenditure on qualifying plant, not to the person whose name is on the title. If you lease your premises and you paid for the fit-out, that expenditure is yours. It is also unusually easy to evidence: an owner has to apportion a purchase price across land, structure and fixtures, whereas a tenant who fitted out a unit can generally point at the invoices.

What qualifies in leased property you fitted out

Partitioning, ceilings and raised floors: Demountable partitioning generally qualifies.
Air conditioning, ventilation and heating: Usually the largest single item in a fit-out.
Lighting and the electrical installation: Including the distribution serving it.
Kitchens, tea points and sanitaryware: Fitted units, appliances and plumbing.
Data cabling and comms provision: Structured cabling and comms room cooling.
Fire alarms, sprinklers and access control: Detection, suppression and door entry.
Signage, blinds and window treatments: Illuminated signage is generally plant.

Not an exhaustive list, and not every item applies to every building. What counts in your case is established by survey, not from a page.

A landlord contribution is the thing that changes the answer

If your landlord contributed to the fit-out, as cash, as a reverse premium, or by carrying out works themselves, then some of that expenditure was not incurred by you and you cannot claim on it. Depending on how the contribution was structured and documented, the landlord may be entitled to allowances on their share instead, or in some arrangements nobody claims because entitlement was never established. The licence to alter, the schedule of works and the agreement for lease decide it, which is why it is worth looking while the documents are still to hand.

Which of these is you

You fitted out the unit and the landlord paid nothing

The straightforward case. The expenditure is yours and the allowances should follow it.

You had a rent-free period instead of a contribution

A rent-free period is not a contribution to your capital expenditure and generally does not reduce what you can claim on works you funded.

The landlord contributed a fixed sum

Your claim is on your share. The contribution has to be identified and stripped out.

You took an assignment with the fit-out in place

You are buying fixtures from the outgoing tenant and the fixtures rules apply much as they do on a purchase.

Questions we get about leased property you fitted out

Our lease only has three years left. Is it worth it?

There is no minimum lease term for plant and machinery allowances. A short lease does not disqualify a claim on expenditure you have already incurred.

What happens to the claim when we leave?

If you leave the fixtures behind there is a disposal to account for, and the treatment depends on the lease terms and on whether you were paid anything. Reinstatement itself is normally a revenue cost, which is a separate relief and often missed.

We have refitted twice during the lease.

Each project is its own expenditure. Older refits that were never claimed are often still available, and superseded items may need writing out.

Other property types

Capital allowances on a leased property you fitted out

What qualifies in leased property you fitted out

A landlord contribution is the thing that changes the answer

Which of these is you

Questions we get about leased property you fitted out

Find out what your fit-out is holding.