Commercial property lawyers could face future action for negligence if they fail to advise clients about impending tax relief changes.
From 1 April, capital allowances, which allow for tax relief for fixtures in property, must be identified and documented at the point at which commercial properties are bought or sold, or they will be lost forever.
Capital allowances specialists Catax Solutions said the UK could be sitting on an estimated £1bn in unclaimed tax relief.
More than 98,000 non-residential property transactions took place in the tax year 2012/2013, of which 10,000 qualified for a capital allowances claims, said Catax.
In November the Law Society partnered with Catax to help raise awareness of the tax relief changes.
Mark Tighe, managing director at Catax Solutions, said there has been a lack of awareness over the changes as it had been unclear whether lawyers, accountants or surveyors should take responsibility for advice.
However, he said it is incumbent on legal advisers to inform clients of the changes.
He said: ‘Unfortunately, the loss of a sizeable tax benefit is only the start. Things are likely to get litigious for any party that oversaw the transaction — whether lawyer, broker, accountant or financial adviser — when their clients discover that they have lost potentially sizeable tax relief.
‘If awareness levels stay as they are then, from a legal standpoint, the next few years could be fractious and represent a considerable financial threat.’
The changes were announced in the 2012 Finance Bill.