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CA claims

01 July 2014
Issue: 4458 / Categories: Forum & Feedback , Business , Capital allowances , Capital Gains

Preserving capital allowances entitlement on a property transfer

Father is proposing to gift to his son the trading premises that are occupied rent-free by his personal company. Before April 2008 a market rent was charged to the company but this ceased to preserve capital gains tax entrepreneurs’ relief.

However no capital allowances were claimed on the fixtures so despite the cessation of the qualifying activity for capital allowances purposes by father no disposal value was required to be brought into account.

Consequently the father does not need to provide the son with a “disposal value statement” under the new rules that took effect from 6 April 2014.

Will the father now have to identify the fixtures and comply with the pooling requirement in respect of the proposed gift if future capital allowances are to be preserved? If so would this apply only to pre-April 2008 expenditure – given that he subsequently did...

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