6 |
Table
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|
|
|
First year |
Initial |
Writing down |
| Plant and Machinery | 40%(SME/T2) | – | 25% RB | |
| – Long life | – | – | 6% RB | |
| – Overseas leasing | – | – | 10% RB | |
| ICT (small enterprise only) | 100% (T1) | – | 25% RB | |
| Energy saving | 100% | – | 25% RB | |
| Ships | Free depreciation
|
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| Industrial buildings | 20% (T2) | 4% SL | ||
| – hotels | 20% | 4% SL | ||
| – Commercial or industrial buildings | ||||
| in enterprise zones | – | 100% | 25% SL | |
| Agriculture, forestry buildings and works | 20%(T2) | 4% SL | ||
| Flat conversions | – | 100% | 25% RB | |
| Mines/oil wells | – | – | 25% or 10% RB | |
| Research and development | ||||
| (ex scientific research) | 100% | – | – | |
| Know how | – | – | 25% RB | |
| Patents | – | – | 25% RB | |
| Dredging | – | – | 4% SL | |
| Assured tenancies
|
–
|
–
|
4%(O) SL
|
|
T1: Temporary (2000–2003); T2: Temporary 1992–1993; O: Virtually obsolete (not applicable to expenditure after March 1992); SME: Small and medium-sized enterprises only. |
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SL: Straight line reduction of percentage of initial expenditure; RB: Reducing balance reduction of percentage of previous balance. |
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24A.1.5.2 When Incurred? |
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| Two rules apply. The first looks at the date on which there is an unconditional obligation to pay ie, in the case of a conditional obligation, the moment when the obligation to pay becomes unconditional.22 Where the purchaser acquires title before the obligation becomes unconditional, the expenditure will be treated as incurred in the period in which title passed, provided the obligation becomes unconditional not more than 1 month after the end of that period.23 The second rule applies the date to the date on which the expenditure became payable.24 It applies where the due date for payment is more than 4 months after the obligation to pay has become unconditional. |
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The first rule is a recent relatively change; previously only the second rule applied. The reason behind this change was to bring the capital allowance rules into line with accountancy practice (which takes this date as the one on which title normally passes). The difference is that an obligation to pay may have become unconditional even though the sum does not have to be paid until a later date,25 here the due date for payment is taken. The rules on timing also include an anti-avoidance rule which applies where the obligation to pay becomes unconditional on a date earlier than that which accords with normal commercial usage, and the sole or main benefit to be derived is the obtaining of the allowance.26 |
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