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The partners in a medical practice wish to claim capital allowances in respect of the surgery premises, which is owned by the partnership. But by claiming the allowances, the doctors’ taxable income may fall below the qualifying level for NHS seniority payments
We act for a medical practice that is a partnership and which owns the surgery premises. After a successful project to identify historical expenditure related to the premises that qualifies for capital allowances we are now in a dilemma as to the timing and how exactly to claim these allowances.
The reason for the uncertainty is that if the taxable income of the respective doctors falls below a certain level they cease to receive what are known as “seniority payments” from the NHS which are essentially a long-term service award each year. So the claiming of the capital allowances is a double-edged sword because it reduces income tax but could also reduce the additional NHS payments.
Our problem is that each partner has different circumstances. Some will want to make the maximum allowance claim because their resulting taxable income will still be high enough afterwards...
