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TC > Capital Allowances > Flashcards

Capital Allowances Flashcards

1
Q

assets are considered to be plant in general if

A

they perform an active function in the business

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2
Q

Classified as plant?
Moveable office partitioning designed to be as flexible as possible to meet changing demands of the trade

A

Yes

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3
Q

Classified as plant?
Free standing decorative screens in the windows of a building society designed to attract local custom

A

Yes

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4
Q

Classified as plant?
Dry dock which acted as a hydraulic chamber in which a variable amount of water could be used to raise and lower a ship

A

Yes - not just a shelter, but deemed essential part in operation of business

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5
Q

Classified as plant?
Swimming pool at caravan park which performed function of giving buoyancy and enjoyment to those using the pool

A

Yes

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6
Q

Classified as plant?
Light fittings, decor and murals in hotel which created atmosphere conducive to comfort and wellbeing of customers

A

Yes

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7
Q

Classified as plant?
Special display lighting

A

Yes

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8
Q

When are assets generally not considered plant

A

When they are merely part of the setting in which business is carried on

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9
Q

Classified as plant?
Ship used as floating restaurant

A

No - structure in which business was carried on, not apparatus employed

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10
Q

Classified as plant?
Stand at a football ground

A

No - setting / place where trade was carried on

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11
Q

Classified as plant?
False ceiling containing conduits, ducts and lighting apparatus in motorway services

A

No - not perform function but merely part of the setting

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12
Q

Classified as plant?
Shipfronts, tiles, water-tanks, staircases and raised floors in chain of restaurants

A

No - part o the premises/setting in which trade carried on

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13
Q

Classified as plant?
Canopy at petrol station

A

No - merely provided shelter not part of the means by which the operation of supplying petrol was performed

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14
Q

Classified as plant?
A building housing car wash machinery

A

No - functions as premises in which business carried out rather than apparatus functioning as plant

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15
Q

Machinery definitoin

A

All machines, motor vehicles and computers

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16
Q

Expenditure specified as qualifying for capital allowances on P&M (2)

A

Building alternations incidental to installation of plant and machinery
License to use computer software

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17
Q

Are capital allowances available for expenditure incurred to comply with fire safety regulations for business preemies made in response to notice from fire authority

A

No

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18
Q

Are capital allowances available for expenditure on fire safety equipment such as fire alarms and sprinkler systems

A

Yes

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19
Q

What is structure and building allowance

A

Capital allowance on new qualifying structures and buildings where contract for construction entered into after 29 October 2018
3% on straight line on qualifying costs once brought into use

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20
Q

What qualifies for S&B allowance

A

Commercial buildings
(Offices, retail and wholesale premises, factories, warehouses and care homes)
Structures - walls, roads, bridges and tunnels

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21
Q

Are student accommodation, military accommodation, prisons and furnished holiday lets qualifying for sba

A

No - residential properties functioning as dwellings

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22
Q

Capital allowances for sole trader/partnership are calculated for each…

A

Period of account
Calculated tax adjusted tp less capital allowance then apply basis period rules

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23
Q

Capital allowances for companies are calculated for

A

Each accounting period

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24
Q

Acquisition cost if VAT registered and VAT recoverable cost is…

A

VAT Exclusive price

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25
Q

Acquisition cost if VAT on input irrecoverable (e.g. car)

A

cost is VAT inclusive price (net cost to business)

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26
Q

Acquisition cost of new asset acquired in part exchange transaction

A

Part exchange + cash

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27
Q

Acquisition cost of personally owned assets bought into business

A

Market value when brought into business

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28
Q

Acquisition cost of assets bought on hire purchase

A

Treated as bought for cash price excluding interest at the date of hire purchase agreement, instalment dates irrelevant

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29
Q

Disposal value is usually

A

Sale proceeds of asset not exceeding original cost

30
Q

Disposal value if given away/sold for less than market value

A

Market value on date of disposal

31
Q

Disposal value if asset scrapped / destroyed

A

Scrap value/compensation

32
Q

Conditions for capital allowances on fixtures when purchased from seller who has previously used them in trade

A

Seller must either claimed FYA or have allocated them to a capital allowance pool prior to sale
Value of fixtures must be formally fixed in most cases by joint election by seller and purchaser which specifies amount of sales proceeds to be allocated (election must be made within 2y of transfer) value allocated cannot exceed original cost

33
Q

Cars with emissions less than 50g/km are in the

A

Main pool

34
Q

Cars with emissions greater than 50g/km are in the

A

Special rate pool

35
Q

New cars with zero emissions and electric cars are in the

A

FYA pool - 100% FYA

36
Q

All machinery, fixtures and fittings and equipment are in the

A

main pool

37
Q

Vans, forklift trucks, lorries and motorcycles are in the

A

Main pool

38
Q

Second hand zero emissions cars unless partly privately owned by sole trader/partner are in the

A

Main pool

39
Q

Qualifying R&D expenditure is in the

A

FYA pool - 100% FYA available

40
Q

New and unused low emission cars where expenditure incurred up to 31 March 2025 are in the

A

FYA pool - 100% FYA available

41
Q

New and unused zero emissions goods vehicles where expenditure is incurred before 6 April 2025 (1 April for companies) are in the

A

FYA pool - 100% FYA available

42
Q

Electric charge point equipment before 6 April 2023 (1 April companies) is in the

A

FYA pool - 100% FYA

43
Q

For companies - new and unused plant and machinery in an area is a designated assisted area within an enterprise zone

A

FYA pool - 100% FYA - expenditure incurred in eight years from date of enterprise zone being establsihed

44
Q

AIA cannot be used against

A

cars, strucutures and buildigns

45
Q

AIA before 1 Jan 2019

A

200k

46
Q

AIA1 January 2019 - 31 march 2023

A

1million

47
Q

air after 1 April 2023

A

200k

48
Q

Long life assets are in the

A

Special rate pool

49
Q

Integral features are in the

A

special rate pool

50
Q

Thermal insulation is in the

A

Special rate pool

51
Q

Solar panels are in the

A

Special rate pool

52
Q

Cars with CO2 emissions > 50g/km are in the

A

Special rate pool

53
Q

Plant and machinery is classed as a long life asset if

A
  • Has when new an expected economic working life of 25 years or more
  • Total expenditure on this kind of asset exceeds £100,000 in the 12 month accounting period (if not add to main pool)
54
Q

Long life asset treatment does not apply to

A

Motor cars
P&M used in retail shops, showrooms, offices, hotels, dwelling houses
ships

55
Q

Electrical systems are identified as

A

Integral features

56
Q

Cold water systems are identified as

A

Integral features

57
Q

Space / water heating systems, powered systems of ventilation, air cooling or purification and any floor/ceiling comprised in such systems are identified as

A

Integral features

58
Q

Lifts, escalators or moving walkways are identified as

A

Integral features

59
Q

External solar shading is identified as

A

Integral features

60
Q

Expenditure on substantial rebuild/replacement of integral features will be

A

allocated to special rate pool and not allowed as revenue deduction if represents more than 50% of full replacement costs

61
Q

Small pool limit

A

if balance on main pool after additions and disposals is less than £1000, WDA can be claimed
pro rata

62
Q

What kind of assets are given separate pools

A

Assets with private use by sole trader/partner
short life asset

63
Q

If short life asset has not been disposed of by the end of xx after the end of the basis period, it is…

A

eight years
Transferred from separate pool to main pool

64
Q

On cessation, any assets taken over personally by the owner are treated as

A

Sold for market value

65
Q

SBA does not include

A

Land, planning permission, fees and stamp duty
Residential property/buildings which function as dwellings

66
Q

SBA rate

A

3%

67
Q

SBA Amount if built

A

cost of physically constructing S/B including costs of demolition or land alterations necessary for construction, and direct costs to bring the asset into existence

68
Q

SBA amount if purchased from developer

A

Based on acquisition cost including land

69
Q

When can SBA be claimed

A

When the claimant has an interest in S/B and only once first comes into use

70
Q

If building extended after introduction of SBA, the capital element of extension is

A

treated as separate asset and SBA available

TC (18 decks)

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