Tax losses opportunities for estates

Many rural sporting and amenity properties operate at an annual deficit. As a result they can carry significant tax losses, a valuable asset often overlooked.

Where an enterprise is not operated as a trade these losses are rated as Schedule A. The estate owner may establish a highly profitable trading enterprise from which Schedule D profits are derived but under the current rules Schedule A tax losses cannot be offset against trading profits.

As a result, many owners of rural property are sitting on a potential goldmine of unused tax losses - in some estimates amounting to well over £100m, with little prospect of ever recouping them from the Inland Revenue.

Under current regulations, however, it may be possible to acquire a commercial investment property yielding a healthy annual profit and to set off accumulated Schedule A tax losses against this for the present and future years.

Regulations allow the rental income from such an investment to be counted along with the other Schedule A estate enterprises and the right investment, as well as producing a useful cash income to the Estate, can produce a tax-free revenue stream for as long as it takes to gobble up carried forward Schedule A losses.

We have written previously about the possible merits of those heavily exposed to illiquid and low yielding rural assets to consider realising some of these or gearing up against them to raise borrowings to invest in commercial property. Whilst such a strategy will not suit all and accountants should be consulted, the tax losses are important assets that need to be considered in strategic estate planning and management enterprise.

O2 deal proves icing on cake for Skypark

As predicted in our October 2004 newsletter, CKD Galbraith is pleased to confirm the resurgence of interest in commercial property in Glasgow for the establishment of high quality call centres.

As part of its UK expansion plan, O2 is to house a new customer service centre and training facility within Skypark, Glasgow's landmark business complex, creating more than 1,500 jobs.   The successful deal with O2 is one of the largest pre-lettings in the Glasgow office market in recent years. 

Pam Over of CKD Galbraith led the negotiations to secure the deal. She said: "The O2 deal is emblematic of the new drive to use high quality office accommodation with first class business facilities.

Skypark is a prime example. The building has been transformed over the past three years through prudent use of exterior and interior design. The complex has concentrated on developing new services that are attractive to employees - leisure facilities, an urban garden and restaurant - and to employers - a media lab and advanced IT infrastructure.

Skypark also has an innovative concierge facility to provide occupiers with a wide range of services including hotel room and car parking booking, dry cleaning pick-up and local information.

It is these kinds of innovations that are proving the icing on the cake for prospective tenants and will continue to boost the lettings within the complex for the next year and more.

Fishing with compliments

CKD Galbraith has teamed up with Property Week magazine to invite readers to compete for a two-day stay in one of the Highlands' best fishing lodges.

The prize, worth several thousand pounds, is a weekend break for two at Syre Sporting Lodge on the banks of the River Naver in Sutherland. The weekend on offer involves fishing on Friday 19 August and Saturday 20 August.

The prize includes all accommodation, meals, wines and spirits, and salmon fishing for two with a personal 'ghillie'. Fishing tackle and tuition will be provided for the novice.

You can enter the competition by answering the following question: According to the Council on Tall Buildings and Urban Habitat, the building pictured to the right is the tallest in the world. In which city is it?

You can enter in two ways:

* by sending the answer to the question, your name, company name, position held, telephone number and business email address to: competition@ckdgalbraith.co.uk

* by entering online at: www.commercial-property-scotland.co.uk/competition.html

To read previous newsletters from CKD Galbraith please click here.

CKD Galbraith is one of Scotland’s leading independent property consultancies, offering a full range of services across the residential, commercial and rural property sectors.

We are a national firm offering unrivalled local knowledge through our offices in Edinburgh, Glasgow, Perth, Cupar, Inverness, Aberfeldy and Ayr and an associate firm in London.

Specialising in quality property and serving the needs of private clients, our consultants have long-established reputations for providing outstanding personal service in many areas including; estate agency, commercial property, rural estate sales and management, building surveying, architectural and building services, holiday cottages and homes, and sporting holidays.

Services include:

For more information please visit www.ckdgalbraith.co.uk