The Budget saw the Chancellor announce some welcome measures for
the real estate sector, including reliefs and stimuli designed to
encourage investment and construction activity by SMEs in
particular. However, there was more bad news for non-residents and
those holding UK property in enveloped structures.
Annual investment allowance
From April 2014, the annual investment allowance (AIA) increased
significantly, giving businesses the opportunity to claim full tax
deductions for the first £500,000 of capital investment
expenditure qualifying for capital allowances. This policy is in
line with the Government's stated objective of stimulating the
current levels of capital investment by businesses, which remain
stubbornly low compared to prerecession levels. It is particularly
beneficial for small and medium-sized real estate businesses, which
will have the opportunity to claim immediate tax relief for a
significant portion of fit-out costs spent on commercial
