Owners of commercial properties in the UK have lost £100m of tax reliefs in the four months to the end of July after an obscure change to the tax regime, according to research by advisers.
A change to regulations at the start of April introduced a limit on how soon after buying a property its new owners could claim tax allowances for spending on plant, equipment and machinery.
Since this expenditure can include items such as air-conditioning, lifts, lighting and carpets, the sums involved are significant.
Up to 85 per cent of a building's fit-out costs can be eligible for these capital allowances, according to property consultancy CBRE.
The new rules say that owners must now claim the allowances within two years of the purchase. Under the previous regime, there was no time limit for making a claim.
As a result of the change, about £100m of capital allowances have been lost through building sales since April, research by tax advisers Catax Solutions estimated.
Catax said the relevant capital allowances had been claimed in just 1 per cent of the 3,000 sales of commercial properties in the UK between April and June this year.
HM Revenue & Customs made the change in order to crack down on property owners making fraudulent tax relief claims.
Mark Tighe, Catax managing director, said: "We have watched in frustration as Britain's commercial property owners throw away an absurd amount of money in tax relief month after month due to a lack of understanding and knowledge of capital allowances."
The details of the rule change were so complex that most people were "struggling to get their heads around capital allowances and the changes introduced", Mr Tighe said.
He added that this could produce a wave of legal challenges.
"We have grave concerns that this is just the tip of an iceberg," he warned, raising the prospect of "accusations of negligence followed by complex and protracted legal proceedings as more and more property owners discover that they could be missing out".
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