Capital Allowances 2024-25

A practical, comprehensive guide to the UK system of capital allowances.

Use this book to avoid costly errors, and to maximise tax relief, thereby protecting the interests of all businesses and commercial property owners. Detailed and practical guidance on key topics re plant and machinery allowances: cars, fixtures in property, annual investment allowances, special rate expenditure, short-life assets, etc. Other allowances, including those for capital expenditure on R&D, and also structures and buildings allowance, are also covered in depth.

The book is written for accountants and others who need a fully technical guide. It complements our 'A-Z of Plant & Machinery', which shows the application of the plant and machinery rules to more than 300 specific types of expenditure. Together, the two books offer well over 1,000 pages of practical and clearly written commentary, arranged in a user-friendly and accessible format.

New for this edition:

• Capital allowances statistics from HMRC
• Updated commentary on abolition of basis periods
• HMRC comment on translating foreign currency expenditure into sterling and on payments not in money
• HMRC explanation of interaction of property business losses with capital allowances
• Commentary updated to show that the £1,000 allowance is available for both trading and property income
• Greatly expanded discussion of whether “serviced accommodation” is a trade or property business
• Meaning of “managing investments of a company with investment business” – additional HMRC guidance
• Detailed new commentary on Upper Tribunal Gunfleet decision re “on the provision of plant”
• Further analysis of meaning of “building” based on FTT case of Acorn Venture
• New section on “fixed structure” including FTT case of Acorn Venture
• Detailed new commentary on Upper Tribunal Gunfleet decision re whether plant should be considered on a piecemeal or single-entity basis
• HMRC one-to-many campaign re AIA claims by group companies
• Additional commentary and example to clarify how first-year allowances are claimed for pre-trading expenditure
• Clarification that full expensing allowances may be given for long-life asset expenditure
• Possible future extension of full expensing allowances to leased assets
• Full expensing made permanent by FA 2024
• HMRC guidance re first-year allowance claims by partnerships where the FYAs are for companies only
• Proceeds assigned or not received – HMRC guidance
• Double cab pick-ups – HMRC proposed revision later abandoned
• Capital allowances for number plates – HMRC guidance
• Interaction of rules for partnerships and limited companies
• Company reconstructions – HMRC guidance re transfer of trade
• Commentary on interaction of SBA rules with computation of capital gains re-written for greater clarity
• Additional HMRC example re allowances for contributions
• Four additional HMRC examples re connected persons