Capital Allowances (Trading Income) Flashcards
What assets should be within the special rate pool?
1) Long life assets
2) Integral features
3) Thermal insulation
4) Solar panels
5) High emission cars
What are classified as long-life assets (that should be in the special rate pool)?
Assets with UEL >25 years, and annual expenditure (for 12 months PoA) over 100k.
What assets should be excluded from the classification of long-life assets?
Assets not included are:
- Cars
- Assets in shops/showrooms/dwellings ships
What assets are classified as integral features?
- Electrical and lighting systems
- Coldwater systems
- Heating, cooling, and ventilation
- Lift, escalators, moving walkways
External solar shading
When can a small pools allowance be claimed?
You can claim 100% allowance (small pool allowance) if the TWDV of a pool is less than £1000.
When should assets be placed in their own pool?
Assets should get their own pools when:
- An asset is partly used for private use and therefore the private use would need to be removed;
- the asset has a short life and is expected to be sold within 8 years.
How to claim allowances on pre-trading expenditure
You would be able to claim an allowance on these by treating the expenditure as if it was incurred on the first day.
The AIA which can be claimed is based on the date the expenditure was actually incurred (it changed to 1m in last few years)
When would a balancing charge arise on disposal of asset?
Balancing charge arises when the disposal proceeds exceed the TWDV. This means you have claimed too many allowances on the asset
When would a balancing allowance arise on disposal of an asset?
Balancing allowance would occur when the disposal proceeds are less than the TWDV when the asset is too disposed.
Allowance would only occur if the asset was not within the main rate pool.
When can structures and building allowances be claimed? and what is the rate?
SBA can be claimed on the following expenditures:
- commercial buildings
- commercial structures
- direct costs required to bring the structure to existence
The rate is 3% for 12 months period
Can you claim capital allowances on second-hand fixtures? What are the requirements?
Yes, if the following conditions are satisfied:
- seller must have previously claimed CA’s on these assets
- Value of the fixtures acquired are fixed (and not higher than the original cost of the asset), and the election to claim was made within 2 years of the sale.
