Capital Allowances (2) Flashcards
Items that are put in special rate pool?
Long life assets
Cars with CO2 emissions of over 50 g/km
Expenditure on plant and machinery that is integral to a building
What are long life assets?
Assets with an expected 25 years or more, where business incurred expenditure of more than £100000 in a 12 month period
What is not treated as long-life assets?
Plant and machinery in dwelling houses
Retail shops
Showrooms
Hotels and offices
Cars
WDA applicable to the special rate pool?
6% for a 12 month period of account
A small balance on the special rate pool?
Can be claimed as a WDA in a similar way to the main pool
Examples of integral features?
Electrical and lighting systems
Cold water systems
Space or water heating systems
Powered systems of ventilation
Lifts or escalators
Where can AIA apply in special pool?
On expenditure except cars
What is more tax efficient for allocation of AIA?
To set AIA against special rate pool expenditure rather than main pool expenditure where there is expenditure on assets in both pools in the period
What happens when an asset that qualified for capital allwoances is disposed of?
Proceeds on disposal are deducted from TWDV of pool to which asset was originally allocated
What happens if a FYA was claimed on the asset
Proceeds on disposal are deducted from the pool to which the item relates
An example of an FYA claimed on the asset?
A zero-emission car
If proceeds from disposal > TWDV of any pool
Balancing charge arises. A negative capital allowance
Effects of a negative capital allowance?
Increases taxable profits
When can a balancing allowance only arise?
On the main pool and special rate pools on cessation of trade
What is a balancing allowance?
Where proceeds on disposal are less than the balance on a pool
