Mandatory Pooling of Capital Allowances for Fixtures HM
With the publicaƟon of their response to the consultaƟon document on the mandatory pooling of fixtures issued on 6 December 2011, it appears that HM Revenue & Customs have listened to some of the concerns of the accountancy profession, whilst also Ɵghtening up on what can be claimed, by who and when.
The main objecƟve of the response is that HMRC have now sought to clarify that “expenditure on a fixture can only be wriƩen off once against taxable profits over its economic life”.
To this end the new legislaƟon places responsibility on to the seller and purchaser of commercial properƟes to agree what level of pooled expenditure is to be sold/purchased as a result of the property transacƟon. This takes effect for all expenditure incurred on or aŌer 1 April 2012 for Companies (6 April 2012 for Individuals and Partnerships).
This agreement is to be achieved using the current legislaƟon under:
SecƟon 198/199 CAA elecƟon, where the seller & purchaser make a joint elecƟon, which effecƟvely fixes the value of the pool.
SecƟon 563 CAA where the parƟes are unable to agree on a value within two years of the transacƟon, resulƟng in the maƩer being referred to the First Tier Tribunal for a decision.
The new legislaƟon makes the availability of Capital Allowances to a purchaser of fixtures condiƟonal on the following three points:
Previous qualifying expenditure being pooled prior to any property sale.
The seller and purchaser agreeing (within a two year period from the transacƟon date) to fix the pool value.
A wriƩen statement from a past owner confirming the disposal value of the pool that he has some Ɵme earlier been required to bring into account.
Quite clearly the first two bullet points will be the main focus for the majority of property transacƟons.
With the onus being placed on the seller/purchaser to agree figures there is a clear opportunity for the accountancy profession to maximise the tax posiƟon for their client, by ensuring all qualifying items are pooled prior to the point of sale enabling a S198 elecƟon to be put into the sale agreement. This can be easily achieved by a targeted survey of the commercial premises that are to be sold or purchased to idenƟfy all qualifying fixtures.
The final area which this publicaƟon deals with is qualifying expenditure that can be claimed by a new owner on any fixtures that have not already been relieved under the Business Premises RenovaƟon Allowance (BPRA) scheme.
Also published on 6 December was revised Capital Allowances legislaƟon on the treatment of items that qualify for Feed-in Tariffs (FiT) and the Renewable Heat IncenƟve (RHI).
Changes to the Capital Allowance treatment on solar panels means that for expenditure incurred on or aŌer 1 (or 6) April 2012 on certain solar panels will no longer qualify for Enhanced Capital Allowances if payments are received under either the FiT or RHI schemes for the electricity produced.
Allowances will however sƟll be available to be claimed in the special rate pool & the Annual Investment Allowance will sƟll be available for this expenditure.
The ReCap team at Abbey Tax has been Source: http://www.abbeytax.co.uk/News/LatestNews/Documents/08-12-11%20Capital%20Allowances%20Briefing.pdf
Is adaptability a normative and spontaneous concept? A review of the literature on social-ecological systems literature and resilience Björn Nykvist1,2* and Thomas Hahn1 1 Stockholm Resilience Centre 2 Stockholm Environment Institute, and Department of Systems Ecology, Stockholm University * Corresponding author: Tel: +46 (0)8-674 7513 Fax: +46 (0)8-674 7020 Emial: bjorn.nykvist@sei.
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