capital allowances


Also found in: Dictionary, Financial.

capital allowances

a standardized method of giving relief for depreciation for tax purposes, only available for certain classes of capital expenditure. The most common qualifying categories of expenditure are on plant and machinery, industrial buildings and on agricultural buildings and works. Depreciation in the accounts is disallowed for tax purposes and is replaced by capital allowances on those assets which qualify. In order to encourage businesses to invest, there are sometimes generous rates of allowance in the period of acquisition (initial allowances or first-year allowances). Any remaining expenditure which has not been relieved is given by means of a writing down allowance at a specified percentage rate per annum. On a disposal, a comparison is made between the disposal value and the tax written down value so that an adjustment can be made to ensure that the total relief equals the reduction in value while the person owned the asset. If too little relief has been given, a balancing allowance is provided and where too much relief has been given, the excess is added to income and is called a balancing charge.
References in periodicals archive ?
When the car is sold, the difference between the tax written-down value of the car (effectively the capital allowances still to be claimed on the vehicle) and the sale proceeds received can be set against company profits in the year of disposal and reduce the company's corporation tax liability.
Industrial cooling specialist, ICS has launched the latest Enhanced Capital Allowance (ECA) Scheme approved chiller products from Climaveneta.
Principal Provisions Relating To Loss Relief, Treatment Of Certain Losses And Capital Allowances, And Group Relief
Most businesses and accountants claim capital allowances for computers, vehicles and tools of the trade.
The Carbon Trust has pledged to expand the list of energy efficient technologies that qualify for popular Enhanced Capital Allowance (ECA) tax breaks, after today securing a three year contract that will see it continue to manage the Energy Technology List on behalf of the government.
From January capital allowances will be increased ten-fold to PS250,000 and will remain at this level for two years, giving Midlands businesses a compelling reason to invest in the new year.
Manufacturers in the Teesside enterprise zone, which was green-lighted by the Government earlier this year, will qualify for large capital allowances against the cost of plant and machinery.
We cover all the main relevant areas within corporation tax and beyond -business taxation, including capital allowances, and employee taxation, PAYE and NIC.
At present, capital allowances on most cars are 25 per cent of the reducing balance, but this is being reduced to 20 per cent, and for 'high emission' cars emitting 160g/km this is going down to 10 per cent.
A MOVE to close a capital allowances property tax loophole by Finance Minister Charlie McCreevy will not affect investors making use of incentives applying to Dublin's International Financial Services Centre.
Peter Booth, TGWU national organiser for manufacturing, said the government should improve capital allowances for new machinery, equipment, research and development.
The total consideration for the transaction is GBP 200 million, inclusive of capital allowances, which has been financed through a combination of bank debt and internal resources.

Full browser ?