Chapter 11 - 2.3 - Capital Allowances Flashcards
What are capital allowances deducted from and why?
Capital allowances are deducted from tax adjusted trading profits to give trading income which is included in the corporation tax computation
What are full capital allowances available on?
All assets even if they are privately used by a director or an employee (but a taxable benefit in kind may arise on either of them)
The allowances for companies are given for an accounting period, so for periods of account longer than 12 months…
Two computations will be needed to cover the first 12 months and the remainder of the accounting period
In addition to the allowances available to sole traders, companies can claim…
A temporary 100% FYA for new and unused plant and machinery in the main pool from 1 April 2023 to 31 March 2026
What do we need to remember about the FYA?
It is not time apportioned for short accounting periods
What happens when assets that have benefitted from full expensing are disposed of?
A balancing charge will arise equal to the disposal value of the asset
