17 January 2018 
Andrea Marshall, Tax Specialist
The Open University has written to HMRC to seek confirmation around capital allowances when a charity sells a building which includes fixtures and fittings. You can see a copy of HMRC's response here.
HMRC has confirmed to the OU that universities (and other charities) must satisfy both the 'pooling' and 'fixed value' requirements. This means that although most universities and charities will choose not to claim capital allowances during their time of ownership, they must take a number of actions, including but not limited to making a claim for capital allowances, at the time of sale, if the purchaser of a property wishes to claim capital allowances on the acquired fixtures. It is really important that universities consider capital allowances when selling any property. Failing to do so could result in achieving a lower price, or unexpected warranty claims from purchasers.
KPMG, who have been assisting The Open University with their property sales, will shortly be providing BUFDG with a more detailed note, including a decision flowchart, setting out the practical issues that universities should consider when selling property.
