Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

TC > Capital Allowances > Flashcards

Capital Allowances Flashcards

1
Q

Capital Allowances: Long life assets definition

A

Plant and machinery

  1. With an expected working life of
    Over 25y

AND

  1. Total cost in a 12m accounting period
    Over 100k
    (Can time-apportion)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Capital Allowances: Long life assets: What can’t be classified as a long life asset?

A
  1. Cars
  2. Ships

P&M used in:
a. Retail shops
b. Showrooms
c. Offices
d. Hotels
e. Houses

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Capital Allowances: What should you first allocate the AIA to, in ortder to be tax effcient?

A

The SRP

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Capital Allowances: Do you time-apportion the AIA?

A

Yes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Capital Allowances: Do you time-apportion WDAs?

A

Yes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Capital Allowances: Do you time-apportion FYAs?

A

No

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Capital Allowances: Treatment when a trader CAN reclaim VAT on the asset?

A

Include NET of VAT

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Capital Allowances: Treatment when a trader CAN’T reclaim VAT on the asset?
E.g. Cars

A

VAT INCLUSIVE

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Capital Allowances: In the exam, should you assume VAT has been treated incorreclty?

A

No

Assume the correct VAT treatment has been applied

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Capital Allowances: Short Life Asset definition

A

Expected to be used for less than 8y

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Capital Allowances: What to do if a short life asset is used for more than 8y?
I.e. by the end of eight years after the end of the basis period (AP for companies)

A

Transferred to main pool
At TWDV

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Capital Allowances: What to consider when I notice:
Commercial buildings/structures
Assets being built by the business itself

A

Structures and buildings allowances (OBT)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Capital Allowances: Does land qualify for structures and buildings allowances?

A

No

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Capital Allowances: Does stamp duty qualify for structures and buildings allowances?

A

No

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Capital Allowances: Do planning permission costs and professional fees qualify for structures and buildings allowances?

A

No

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Capital Allowances: Main rule for structures and buildings allowances?

A

Must be non-residential use

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Capital Allowances: Structures and buildings allowance: What to do if a building is partly used for trade and partly rented?

A

SBA apportioned
(Between trading profits and rental income)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Capital Allowances: Do buildings which function as dwellings apply for structures and buildings allowances?
E.g. student accommodation
Prisons
Military accommodatoin
Holiday lets

A

No

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Capital Allowances: Is the SBA time-apportioned?

A

Yes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Capital Allowances: Do assets not yet brought into use apply for structures and buildings allowances?

A

No

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Capital Allowances: Are capital allowances available on the cost of structures and buildings? (As well as SBA)

A

No

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Capital Allowances: Are capital allowances available on the cost of plant and machinery? (As well as SBA)

A

Yes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Capital Allowances: SBA: Treatment on the asset’s disposal

A

Proceeds received by the seller
Increased by the SBAs claimed to date
(For chargeable gains purposes)

Buyer takes over the remainder of the SBA period
And
Receives SBAs based on the original cost of the asset

(There is no balancing adjustment for the seller)

24
Q

Capital Allowances are the tax version of depreciation on what?

A

PLANT AND MACHINERY

25
Q

Capital Allowances: P&M definition

A

With which not in which

E.g. cars, computers, fixtures, fittings, furniture, equipment

26
Q

Capital Allowances: Is thermal insulation of a building P&M?

27
Q

Capital Allowances: Is building alterations incidental to installation of P&M, P&M?

28
Q

Capital Allowances: Is a licence to use computer software P&M?

29
Q

Capital Allowances: Is fire safety equipment P&M?

30
Q

Capital Allowances: Is movable office partitioning P&M?

31
Q

Capital Allowances: Is free standing decorative screens P&M?

32
Q

Capital Allowances: Is a dry dock P&M?

33
Q

Capital Allowances: Is a swimming pool at a caravan park P&M?

34
Q

Capital Allowances: Are light fittings, decor, murals etc. in a hotel - to create atmosphere - P&M?

35
Q

Capital Allowances: Is special display lighting P&M?

36
Q

Capital Allowances: Is a ship used as a floating restaurant P&M?

37
Q

Capital Allowances: Is a football ground stand P&M?

38
Q

Capital Allowances: Is a false ceiling P&M?

39
Q

Capital Allowances: Are shop fronts, tiles, water tanks, staircases and raised floors in a restaurant P&M?

40
Q

Capital Allowances: Is a petrol station canopy P&M?

41
Q

Capital Allowances: Is building housing car wash machinery P&M?

42
Q

Capital Allowances: Is pre-trading capital expenditure eligible for capital allowances?

43
Q

Capital Allowances: Capital Allowances: How is pre-trading capital expenditure trested

A

As if incurred on first day of trading

44
Q

Capital Allowances: What to look up if an asset is zero emission?

45
Q

Capital Allowances: What to watch out for with cars?

A

Do they enter the main pool or FYA

46
Q

Capital Allowances: What can be done for pools under 1k?

47
Q

Capital Allowances: Disposals from the main or special rate pool: Treatment

A

Deduct the LOWER of:

1. Proceeds

2. Original cost

(Before giving WDA)

48
Q

Capital Allowances: What to remember when encountered with:
1. Private use assets (By the owner)
2. Short life assets

A

Single Asset Pool (OBT)

49
Q

Capital Allowances: Disposal of asset: From single asset pool: Proceeds greater than TWDV

A

Balancing CHARGE

50
Q

Capital Allowances: Disposal of asset: From single asset pool: Proceeds less than TWDV

A

Balancing ALLOWANCE

51
Q

Capital Allowances: Disposal of asset: From single asset pool: Can any non-business proportion be claimed?

52
Q

Capital Allowances: Disposal of asset: From main or special rate pool: Which (balancing) allowances apply?

A

NONE

(Unless ceasing to trade)

53
Q

Capital Allowances: Disposal of asset: From main or special rate pool: Which (balancing) charges apply?

A

If the pool turns negative following a disposal

54
Q

Capital Allowances: Is AIA available in final period of account on cessation of trade?

55
Q

Capital Allowances: Is WDA available in final period of account on cessation of trade?

56
Q

Capital Allowances: Is FYA available in final period of account on cessation of trade?

57
Q

Capital Allowances: Cessation of trade: Process

A
  1. Add: Additions (In the period)
  2. Deduct: Disposals (in the period)
  3. Calculate a balancing adjustment on each pool (To bring the TWDV c/f to zero)

TC (8 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions