Fixed values

02 October 2012

Issue: 4373 / Categories: Forum & Feedback , Business , Capital Gains , Income Tax

A partnership that has made substantial capital allowances claims on fixtures at its premises is to be incorporated. Advice is required on the interaction of CAA 2001, s 187A, which requires the value to be fixed, and s 266, which relates to connected parties

I am in the process of incorporating a trading partnership which has made significant capital allowance claims on the fixtures inherent in the premises. All assets and liabilities will be transferred in exchange for shares in the company.

I am aware of the new requirement from April 2012 of the need to fix the disposal value of the fixtures under CAA 2001 s 187A(5) if the company is to be eligible for capital allowances going forward.

However an election under CAA 2001 s 266 is being considered to transfer the fixtures (and chattels) at tax written down value (TWDV). How does this interact with the “fixed value requirement”?

CAA 2001 s 267 describes the effect of the election. It states that the relevant plant and machinery is treated as sold for a price that avoids balancing adjustments (TWDV). So we technically have a disposal...

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Fixed values

02 October 2012

I am aware of the new requirement from April 2012 of the need to fix the disposal value of the fixtures under CAA 2001 s 187A(5) if the company is to be eligible for capital allowances going forward.

However an election under CAA 2001 s 266 is being considered to transfer the fixtures (and chattels) at tax written down value (TWDV). How does this interact with the “fixed value requirement”?

Only subscribers may read the full article