Chapter 7&8 Flashcards
What assets are not qualifying for capital allowances
Any assets which merely form part of the setting in which the business is carried out - buildings, walls, floors, ceiling and windows
What are the annual investment allowance (cap allows)
1,000,000 from Jan 2019 to march 23
200,000 from April 23
What assets go in the main pool of capital allowances (4)
All machinery, fixtures and fittings and equipment
2nd hand zero emission cars
Cars with co2 emissions 1-50 g/km
Vans, forklifts lorries and motorcycles
Which assets qualify for the special rate pool (4)
Long life assets (useful life >25 yrs)
Integral features
Cars with co2 emission > 50 g/km
Thermal insulation and solar panels
Which 5 assets qualify for 100% FYA
New electric cars emissions of 0g/km
New zero emissions goods vehicles
Research and development capital expenditure
Electrical charge point equipment
Purchase of new plant and machinery to use in designated enterprise zone
Which of the following are scaled down for short periods:
FYA
AIA
WDA
FYA not scaled
AIA scaled
WDA scaled
If an asset is sold for less than its tax written down value, which balancing payment is needed
Balancing allowance will be given
What can you do with short life assets and capital allowances
De pooling - fast depreciating asset can be de pooled so you get a balancing adjustment on sale
- after 8 years of holding TWDV goes back in main pool
What is the SBA calc
3% of original cost (not land) * n/12
Straight line
Costs include building, land alterations and direct costs to bring the asset into existence
What happens for the seller if a building getting SBA is sold
What about the buyer
Seller increases proceeds on disposal by the SBA claimed to date
Buyer relief continues based on original cost so no uplift for any increase in value
How can you set trading losses against general income
What happens to any remaining loss
Current year relief and/or carry back relief (1 tax year only)
‘All or nothing’
Carry forward and set against first available future trading profits of the same trade
When writing about loss relief in an exam what 3 things must you mention
How much loss will be used
When will it be used (which tax year)
What will it be used against eg general income, trading income
When is opening year loss relief available
How does it work
Available for trading losses incurred in first 4 tax years
Trading losses set against income of the three tax years preceding tax year of the loss in FIFO basis
All or nothing
Which losses apply for the terminal loss relief
How does it work
Loss available is the loss of the last 12 months of trading
Relief given against trading income in the final tax year and previous 3 tax years on LIFO basis
All or nothing
What is the limit on loss relief against non trading income ie employment income
There is a limit of higher of:
1. 50,000
2. 25% of adjusted total income
