Capital allowances

Changes to the annual investment allowance made in this year’s Finance Bill

A new company has constructed and installed a wind turbine for a considerable sum on land that is rented from a farmer for a share of profits

A client is planning a doggy day care business that will operate from premises, rented under a licence, which have been unused for several years

A UK resident acquired a portfolio of commercial properties from his uncle in 2011. The uncle did not claim any capital allowances in respect of the properties

A business is likely to make substantial investments in plant and machinery in the period towards the end of 2014, before the annual investment allowance reverts from the temporary limit of £250,000 to £25,000

Harvey’s Jersey Cream Ltd (TC3045)

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

In the replies to the query Rent accounts, it was stated that the installation of central heating would qualify as an integral feature and therefore capital allowances would be available.

Reference was made to HMRC’s Capital Allowances Manual at CA 21200 and CA22330.

CAA 2001, s 15 lists various qualifying activities for the purposes of CA 2001, Part 2 (“plant and machinery allowances”) and these include:

By Ray Chidell and Lindsay Pentelow; paperback; 480 pages; £78.50; Claritax Books

D Thomson (TC2858)

A company is planning to cease trading in three years’ time. It has a substantial share premium account represented by cash, but there is concern that a distribution of this will be treated as income rather than capital

HMRC have refused a claim to the annual investment allowance by a limited liability partnership because the partners were an individual and another LLP