4. TC - Capital Allowances Flashcards
What are the steps to tax a sole trader?
- Adj profits for the acc period
- Deduct capital allowances for that acc period
= Adj trading profit for acc period - Consider which tax year to tax this acc period in
What are capital allowances?
They are the tax version of dep’n on P&M
Define plant and machinery
Assets with which the business operates rather than IN which it operates
i.e. petrol pumps/atmospheric lighting rather than garage canopy/general lighting
Define machinery
Machinery includes all machines, motor vehicles and computers
Define plant
Plant includes fixtures, fittings, furniture and equipment
Give some examples of items that have been specified as plant by tax legislation
- Thermal insulation of a building
- Building alterations incidental to installation of plant and machinery
- Licence to use computer software
- Fire safety equipment e.g. fire alarms/sprinkler systems
Give some examples of items that have been held to be plant in case law
- Moveable office partitioning
- Free standing decorative screens
- Dry dock
- Swimming pool at caravan park
- Light fitting/decor/murals in a hotel used to create atmosphere
- Special display lighting
Give some examples of items that have been held to NOT be plant in case law
- Ship used as floating restaurant
- Football ground stand
- False ceilings
- Shop fronts, tiles, water tanks, staircases and raised floors in restaurants
- petrol station canopy
- Building housing car wash machinery
Are the following plant according to case law?
- Moveable office partitioning
YES
Are the following plant according to case law?
- Thermal insulation of a building
YES
Are the following plant according to case law?
- Building alterations incidental to installation of plant and machinery
YES
Are the following plant according to case law?
- Licence to use computer software
YES
Are the following plant according to case law?
- Fire safety equipment e.g. fire alarms/sprinkler systems
YES
Are the following plant according to case law?
- Free standing decorative screens
YES
Are the following plant according to case law?
- Dry dock
YES
Are the following plant according to case law?
- Swimming pool at caravan park
YES
Are the following plant according to case law?
- Light fitting/decor/murals in a hotel used to create atmosphere
YES
Are the following plant according to case law?
- Special display lighting
YES
Are the following plant according to case law?
- Ship used as floating restaurant
NO
Are the following plant according to case law?
- Football ground stand
NO
Are the following plant according to case law?
- False ceilings
NO
Are the following plant according to case law?
- Shop fronts, tiles, water tanks, staircases and raised floors in restaurants
NO
Are the following plant according to case law?
- petrol station canopy
NO
Are the following plant according to case law?
- Building housing car wash machinery
NO