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Table of Contents

24A.1 Introduction

 

24A.1.1 The Problem

 

24A.1.2 History

 

24A.1.3 Accelerated Allowances

 

24A.1.4 Types of Allowance

   

24A.1.4.1 Example

 

24A.1.5. Incurring Capital Expenditure

   

24A.1.5.1 Not Finance

   

24A.1.5.2 When Incurred?

   

24A.1.5.3 A Special Case—Non-Recourse Finance

 

24A.1.6 Giving Effect to Allowances

   

24A.1.6.1 Taxing the Qualifying Activity: Schedule A Business, Trade etc

   

24A.1.6.2 Other Allowances Given by Repayment

 

24A.1.7 Amounts: Price or Market Value?

   

24A.1.7.1 Sales between Connected Persons

   

24A.1.7.2 Apportionment of Proceeds

   

24A.1.7.3 Discontinuance and Deferrals: Succession to Trades

 

24A.1.8 Choice of Allowances

 

24A.1.9 Capital Allowance and Revenue Expense Compared

24A.2 Plant and Machinery

 

24A.2.1 Elements

   

24A.2.1.1 Outline

     

24A.2.1.1.1 Qualifying Activities and Apportionment

   

24A.2.1.2 Successions

   

24A.2.1.3 Unusual Acquisitions: Change of Use and Gifts—Market Value

   

24A.2.1.4 Similar Reliefs

   

24A.2.1.5 Partners

   

24A.2.1.6 Qualifying Activities: General

   

24A.2.1.7 Qualifying Activities: Employment

   

24A.2.1.8 Claims and Backdating: Repeated Provision

   

24A.2.2 ‘Belong to’/‘Owned by’

     

24A.2.2.1 Reversing Costain: The Fixtures Rules

   

24A.2.3 What is Plant and Machinery?

     

24A.2.3.1 General

     

24A.2.3.2 Computer Software

   

24A.2.4 Plant or Setting

     

24A.2.4.1 Statutory Prescription of Settings

     

24A.2.4.2 Plant or Setting: Case-Law Principles

     

24A.2.4.3 Defining the Unit

     

24A.2.4.4 Defining Setting

     

24A.2.4.5 Case-Law Survey

   

24A.2.5 First Year Allowances

     

24A.2.5.1 General

       

24A.2.5.1.1 Small and Medium-Sized Company

     

24A.2.5.2 Small Enterprises and Temporary ICT Allowance

     

24A.2.5.3 Energy Saving: Any Size

   

24A.2.6 Writing down Allowances, Balances and the Pool

     

24A.2.6.1 Pooling

     

24A.2.6.2 Examples

   

24A.2.7 Disposal Value

     

24A.2.7.1 Amounts

       

24A.2.7.1.1 Market Value

       

24A.2.7.1.2 End of Asset

       

24A.2.7.1.3 End of Trade

   

24A.2.8 Short-Life Assets—the Non-Pooling Option

   

24A.2.9 Long Life Assets

   

24A.2.10 Motor Vehicles

     

24A.2.10.1 Full Allowances

     

24A.2.10.2 Restricted Allowances on ‘Expensive’ Motor Cars

   

24A.2.11 Hire Purchase

   

24A.2.12 Leasing—Special Rules

     

24A.2.12.1 Trade of Leasing Qualifies

     

24A.2.12.2 Not in Course of Trade-Separate Qualifying Activity

     

24A.2.12.3 Overseas Leasing

     

24A.2.12.4 Lessee’s Expenditure

   

24A.2 13 Ships

   

24A.2.14 Master Copies of Films

   

24A.2.15 Anti-Avoidance: Relevant Transactions, Finance Leases and Leasebacks

24A.3 Industrial Buildings

   

24A.3.1 General

     

24A.3.1.1 Structure of Allowances

   

24A.3.2 Definition of Industrial Building

     

24A.3.2.1 Qualifying Trades

     

24A.3.2.2 Storage

       

24A.3.2.2.1 Others

     

24A.3.2.3 Exclusions

     

24A.3.2.4 Extensions Beyond Qualifying Trades

     

24A.3.2.5 Parts of Building

     

24A.3.2.6 Example

   

24A.3.3 The Relevant Interest—Who can Claim the Allowances?

     

24A.3.3.1 Election for Long Lease

     

24A.3.3.2 No Election

     

24A.3.3.3 Initial Allowance for Lessee

     

24A.3.3.4 Lease Ends: Allowances Continue

     

24A.3.3.5 Initial Allowance: Licence as Good as Lease

   

24A.3.4 Initial Allowances: Enterprise Zones

   

24A.3.5 Writing down Allowance

   

24A.3.6 Balancing Adjustments: Allowance and Charges

     

24A.3.6.1 The Residue of Qualifying Expenditure

     

24A.3.6.2 Example 1

     

24A.3.6.3 Example 2

     

24A.3.6.4 The Purchaser

     

24A.3.6.5 Minor Matters

     

24A.3.6.6 Building not Land: Artificial Arrangements

   

24A.3.7 Other Buildings

     

24A.3.7.1 Qualifying Hotel Buildings and Extensions

     

24A.3.7.2 Dwelling House—Assured Tenancies

24A.4 Agricultural Land

24A.4A Conversions of Parts of Business Premises into Residential Flats

24A.5 Mining

 

24A.5.1 Qualifying Expenditure

24A.6 Research and Development Allowances

24A.7 Know How

24A.8 Patents

24A.9 Dredging

24A.10 Commentary: Policy and History

   

24A.10.1 Policy

 

 

24A.10.2 Grander Theories

 

 

24A.10.3 The UK System Scope and Rates

 

 

24A.10.4 Further Problems

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