Capital Allowances Flashcards
Yarman v France
Defines ‘plant’ as all fixed or moveable goods or chattels that are used for the carrying on of business. Does not include good bought or to be sold, but those with PERMANENT ESTABLISHMENT in the business
Jarrold v John Good & Sons
CoA held that MOVEABLE PARTITION WALLS fulfilled a function, therefore plant. They have since been incorporated into s.23 CAA 2001
Decorative assets provided for the enjoyment of the public in hotel, restaurant or similar trades - case name:
CIR v Scottish & Newcastle Breweries Ltd: agreed that decorative items like wall tapestries, murals and sculptures were plant because they created ambience and atmosphere
Benson v Yard Arm Club Ltd
Restaurant business held on ship and barge as FLOATING RESTAURANT NOT PLANT. Merely provided structure within which business was carried on.
JD Wetherspoon plc v Revenue and Customs Commissioners
3 key points:
-PANELLING is not plant but is part of premises
-only expenditure needed as a result of PLANT BEING INSTALLED into an existing building is plant (i.e. strengthening floor for new cooker)
-if preliminaries (e.g. scaffolding) cannot be attributed easily to a single item, but a PRO RATE APPORTIONMENT should be fair across all categories of expenditure
Difference between integral feature and fixtures?
Integral features are PM that offer a long economic life to the business, hence qualify for reduced 6% WDA. Listed in s.33A.
Fixtures are assets installed or fixed in to a building so it becomes PART of the building. These offer a permanent and lasting improvement. Fixtures which are PM (integral features) are allowable for CA.
What is the fixed value requirement?
Applies where fixtures acquired in a building and past owner was entitled to CAs. Buyer and seller can make joint election under s.198 to fix the value of fixtures, or a just and reasonable apportionment can be made, ratified by FTT.
Value cannot exceed original cost of fixtures or selling price.
What is the ‘pooling requirement’ for CA?
Seller must allocate fixture expenditure to CA pool, so expenditure is pooled.
What is the relevant date for ‘pre-commencement integral features’
6 April 2008 - before this CA where not eligble for integral features like electrical systems / heating etc.
Pooling and fixed value requirement do not apply to assets where CA could not have been made.
What is a fixture?
An asset installed or fixed into the building that is becomes part of the building.
Purpose to be permanent and result in lasting improvement.
Where is 50% FYA available?
On integral features (solar panels, plumbing electrical systems)
Relevant date for SBA to apply?
Construction of building after 29 October 2018, for NON RESIDENTIAL use
What is the pooling requirement?
Seller has previously allocated the cost of fixtures to CA pool, or claimed AIA/FYA on them.
Must be met in addition to fixed value requirement, or else no CA claimed on fixtures.
