CH6 Capital Allow - RECAP Flashcards
When can you apply AIA (annual investment allowance)?
and when can you not
You can apply AIA to most purchases of plant and machinery up until the limit of 1,000,000
You cannot claim AIA on business cars, if you owned it for personal use before you started using it for business use, If it was given to you.
Thus where you cant claim AIA, instead claim WDA
Where does AIA go?
It goes into the main pool
Hence we would add the acquisitions in the main pool subject to AIA, and deduct the total AIA (upto 1 mil)
When including disposals, we will always deduct the lower of?
Proceeds and cost
If the sales proceeds are < TWDV, the proceeds therefore must have been less than the original cost. Why does this affect how we process the disposal?
We deduct the proceeds of disposal, rather than cost asset being disposed
Where do we see a purchase of new office furniture enter in our tax computation, and does it qualify for anything?
Main pool
Qualifies for AIA
In our workings, if we can two cars of the same PU can we include them in the same column?
No, they must always be seperate
What is the small pool allowance?
upto £1000
meaning if the TWDV before WDA is applied is below 1000, we can reduce it down to nil
What are subject to 100% FYA?
Zero emmission cars
What cars are subject to the standard WDA of 18%?
Standard emissions of 1g/km - 50
What is the AIA for a 3 month accounting period?
1,000,000 * 3/12
When do we apply FYA in our calculation?
After we have done AIA, then WDA
What do we mean by plant and machinary?
These are assets with which the business operates, rather than IN WHICH the business operates
What comes under definition of a plant?
thermal insulation of a building
building alterations
license to use comp software
fire safety equipment
moveable office stuff
dry dock
light fittings / decor in a hotel for atmosphere
When would it be the case that a car that has 0 emmisisons is NOT eligable for 100% FYA
if it was second hand
Which allowances are time apportioned, and which are not?
Time apportioned - WDA and AIA
Not - FYA
