FRF (South Wales) Ltd v HMRC [2024] UKFTT 1145 (TC)
18th December 2024
In FRF (South Wales) Ltd v HMRC [2024] UKFTT 1145 (TC), the First-tier Tribunal has allowed the taxpayer’s appeal in respect of its claim for capital allowances to bring back into productive use a previously disused warehouse through its conversion into a car showroom. The FTT had to decide the proper statutory meaning of the words ‘conversion’ and ‘renovation’ in the Capital Allowances Act 2001, and find as a fact whether or not the substantial alterations to the structure and the fabric of the building amounted to a ‘conversion’. The FTT agreed with the taxpayer that a purposive approach was required to the capital allowances relief, and that as a matter of fact there was sufficient continuity of identity for the substantial works to be a ‘conversion’; the taxpayer’s claim for Business Premises Renovation Allowance was upheld. Whilst BPRA was abolished in 2017, relevant concepts including what is a ‘conversion’ and when does a ‘demolition’ occur are carried on into current heads of capital allowances.
Denis Edwards acted for FRF (South Wales) Ltd, instructed by MHA.
Decision link: https://caselaw.nationalarchives.gov.uk/ukftt/tc/2024/1145?tribunal=ukftt%2Ftc