Ch 4: Capital allowances Flashcards
What asset never gets AIA?
Cars
Who should you give AIA to first?
Give to special rate pool assets first
What happens to AIA for 51% companies
Groups of companies >50% share 1 AIA
What type of assets are included in the special rate pool (3 things)?
- Cars with CO2 >110g/km
- Long life assets
- Plant and machinery integral to a building (space or water heating systems, electrical and lighting systems, ventilation systems, cooling, or air purification, lifts and escalators, cold water systems)
What assets get 100% first year allowance?
- Energy saving technology
- New cars with emissions <50g/km
What amount can you claim all of the MP and SRP?
£1000
What happens to CAs in your final accounting period?
No WDA/ AIA/ FYA
Only BA/BC from:
sale of assets
transfers to owner (‘sold’ @ MV)
What effect do disposals have on capital allowances?
The lower of sales proceeds and the original cost of an asset are deducted from the pool when the asset is disposed of (before calculating WDA)
TWDV
Disposals
= balancing allowance/ charge (x)/x
What is an example of a short life asset?
computer equipment
What is the benefit of making a de-pooling election for a fast depreciating asset?
The trader obtains a balancing adjustment on sale
Do SLAs qualify for AIA?
Yes, but only beneficial to elect SLA if the AIA is fully utilised for the period
Is there any AIA in the year of cessation?
No, there is no AIA, FYA or WDA. Instead there is a balancing allowance or charge on the disposal
What value is given to assets transferred as a going concern?
If they are transferred to a connected person the trader may elect to transfer assets at the TWDV
What are the 5 conditions of the TAGC transfer?
- elect within 2 years
- direct relatives and companies the trader controls are connected
- the trader transfering can’t claim CA’s in their final period of account
- the transfer at TWDV avoids balancing allowances and balancing charges
- must transfer ALL assets (except cash & ongoing business)
