Enterprise Zone

[mwgregg]

I made an investment in a commercial building within an enterprise zone in 1999, where there was 100% initial tax allowance, this allowance was used to offset an income tax liability.
I needed to hold the investment for a minimum of 7 years so as not to trigger a tax clawback.
The building has now been sold and I have a capital loss.
Can this loss be used to offset other capital gains, or has the 100% initial allowance already dealt with this?

[al_eebee]

If you made it through one of the enterprise zone trusts then you should be able to claim the loss following the taxpayers win in the Smallwood case earlier this year.

Look here for more - http://213.86.35.230/UKTaxLibrary/UK+Ta ... =Published

You needed to hold the investment for 25 years to avoid withdrawal of the tax relief, but it is possible to get around this by carving out a lesser interest in the property and disposing of that whilst retaining the headlease/freehold, generally on a peppercorn rental so that the value of the part retained is negligible.

If your investment in the property was direct and not by means of one of the Enterprise Zone Property Trusts then your capital loss would be restricted broadly by the tax relief obtained.

If however the investment was through one of the EZPUT's then the ruling in Smallwood confirms that for CGT purposes you do not have to look through the trust and restrict the loss it IT relief is not withdrawn