Capital Allowances

Question 1

Meaning

Answer 1

The relief for the fall in value of qualifying assets

Question 2

Qualifying expenditure

Answer 2

If asset provides a function for trade it is plant and machinery

If it is part of setting it may qualify for Structures and buildings allowances.

Question 3

Main pool

Answer 3

18%

AIA £1m per year (can pro rata for time)

If balance below 1k can fully write off

Question 4

Special rate pool

Answer 4

6%

Expected working life >25 years, anything integral to a buildings, cars with emissions >110g/km

AIA to be allocated to special rate pool first

Question 5

Balancing allowance

Answer 5

Arises when pool is negative after disposals, can only arise on main pool on ceasation

Question 6

Cars

Answer 6

50g/km or less can get 100% first year allowance
51-110g/km main pool
Above 110 special rate pool

Question 7

Private use assets

Answer 7

Only claim business portion on WDA (for sole traders / partnerships)

Question 8

Short life assets

Answer 8

Allows balancing allowance when asset is disposed

Question 9

Cessation

Answer 9

No WDA on final period but balances allowance is the figure to write off

Question 10

Structures and buildings allowance

Answer 10

Qualifying expenditure - construction of offices, shops, factories.
Cost of land and acquisition expenses.
Enhancing current property can apply
3% WDA straight line