Flat Conversion Allowances

Flat Conversion Allowances (FCAs) were introduced by Finance Act 2001. It is intended to encourage the conversion of empty or underused space above shops and other commercial premises to residential use.

Allowances are available if a person incurs qualifying expenditure in respect of a flat. However, there are a number of conditions that must be satisfied.

• Firstly, the flats must be available for short-term letting and the allowances are not available for flats that are created as high value.
• The property in which the flats are situated must have been built before 1980 and must not have more than four storeys above the ground floor.
• The upper floors must have been unused or only used for storage for at least one year and these floors were originally designed for primarily residential use.
• Conversion or renovation works in an extension to a property built before 1980 that are completed by 31 December 2000 can also qualify for FCAs.

The scheme provides an allowance of 100% of the qualifying expenditure. Qualifying expenditure is capital expenditure incurred in connection with the conversion of a qualifying building. There may be a recovery of allowances given if the flat is sold or ceases to be used for letting within 7 years from the time the flat is suitable for letting.

Capitus Regeneration & Sustainability can:

• Identify properties likely to qualify for the relief both pre and post purchase
• Collate all necessary cost and construction information
• Prepare, submit and negotiate the claim on your behalf either directly or in association with your accountants