Banking Tax Finance
Accountants Special - Issue 1
In this Issue
Capital Allowances on Furnished Holiday Lettings
Main Pool — Plant or Machinery
Pre-contract Negotiations for Capital Allowances
The Identification of Repairs
Basic Guide and Introduction to Capital Allowances
It Might Very Well be Green, But is it Plant or a Machine?
MCashback - The Final Verdict
The Gazebo Case
Interaction of Capital Allowances and Capital Gains Tax
 
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Welcome

We are pleased to bring you the first edition of "Bottom-Line Thinking for Accountants." This is an extension of our normal publication "Bottom-Line Thinking" and the content is carefully tailored to meet the needs of Accountants and Tax Practitioners. We hope you find it of interest and welcome your feedback. You will be aware there are a number of HMRC consultations, including three separate ones on Capital Allowances. Our team is actively involved in preparing responses to all these and in particular the proposed changes to the fixtures legislation where we have been invited onto the small working party.

We will be issuing an update on the consultation inviting your feedback in the next few weeks, but in the meantime if you have any comments please send these to christine.weaver@davislangdon.com

Richard Whittaker
richard.whittaker@davislangdon.com
 
Capital Allowances on Furnished Holiday Lettings
After the 2009 Budget, it was announced that the "Furnished Holiday Lettings" (FHL) rules were to be extended to any country within the European Economic Area (EEA). So what are the tax benefits of the FHL rules?

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Apartment-with-Pool--791720

Main Pool — Plant or Machinery
Confused over which rates now apply to different categories of plant? This article identifies the different asset pools and their treatment, following the capital allowance rule changes last year affecting all expenditure after April 2008.

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Boiler-pipes---294886

Pre-contract Negotiations for Capital Allowances
The value of capital allowances to either party to a property transaction will depend on various factors, but the bottom line is that capital allowances save tax and therefore, have value. This article touches on some of the practical implications of badly worded contract clauses dealing with capital allowances and the relevance of the pre-contract documentation that may exist in some common situations that we have encountered.

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The Identification of Repairs
The problem when analysing building works carried out to an existing property, classified in the accounts as a fixed asset or investment property is where to draw the line.

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Roof-repairs_38290684

Basic Guide and Introduction to Capital Allowances
This guide is set out in the form of questions and answers; we have endeavoured to include most of the questions that could arise.

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Questions_9755746

It Might Very Well be Green, But is it Plant or a Machine?
Just because a building is "green" does not mean it will attract a greater level of capital allowances. This was borne out very clearly from the decision in the recent case of Mrs. M. E. McMillin -v- HM Revenue & Customs. (2011).

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Row-of-books_40288147

MCashback - The Final Verdict
On 11 May 2011, the House of Lords gave its judgement in the case of HM Revenue & Customs (HMRC) -v- Tower MCashback LLP1 and another. The Court of Appeal had previously found in favour of the taxpayer and HMRC appealed to the House of Lords against that judgement. Whilst the case revolved around a tax scheme involving expenditure on software rights, it has much wider ramifications because of two major points of issue.

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The Gazebo Case
In the recent case of Mrs. C. A. Andrew -v- HM Revenue & Customs. (2010), the First-Tier Tribunal (Tax Chamber) had to decide whether a gazebo in the grounds of a public house qualified as plant.

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Gazebo_17093242

Interaction of Capital Allowances and Capital Gains Tax
Time and time again, we come across investors having not claimed capital allowances because it was believed that the benefit would be wiped out when the property is sold due to capital gains tax (CGT). The mistaken argument…

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Whilst every effort has been made to ensure accuracy, information contained within our newsletter may not be comprehensive and recipients should not act upon it without seeking professional advice.