Capital Allowances: Untapped Potential for Property Investors and Developers - Coursework Example

Knowing the difficulties with funding and financing that most industry players in the commercial property sector go through, especially those in private local businesses, the government have often put in place regulations and laws that ensure that there will be a balance between what government gets from the sector and what the sector gives to the nation. It was out of such vision that the Capital Allowances Act 2001 was born to serve as a form of a tax incentive on the profits that specific businesses make.

With the nature of the capital allowance and how it functions, it has been noted to be a relief on the capital expenditure of businesses in terms of the financial spending they make with regards to cost on vehicles, machinery, plant, certain types of building, and research and development. As claims for the capital allowance is made, it is expected that companies and businesses in the commercial property sector would have a means of directly cutting down on expenditure so that they can invest more and ensure the collective growth of the economy.

Through primary data collection performed with the use of an interview, what can be seen as a contrary situation can be said to be existing. This is because there are several unclaimed capital allowances meaning that the benefits with this provision remain largely untapped. The interview reviewed that processes in making claims are generally cumbersome and thus less motivating to pursue. What is more, the areas covered are not considered to be the most critical for the sector. Resolving these issues would therefore mean collective growth of the national economy.

The government has constantly put in efforts that are aimed at making the business environment very attractive to investors and entrepreneurs. Those in the property development sector have often had their own share of the benefits that the government puts in place to ensure that the business environment is highly lucrative and motivating for them.