APPENDIX 1
Changes suggested in response to Exposure
Drafts Nos 3, 5, 7 and 9 and the draft Capital Allowances Bill
PLANT AND
MACHINERY ALLOWANCES
(a) Extend sections 83A (Gifts in kind to charities etc)
and 84 ICTA (Gifts to educational establishments) to gifts of
plant or machinery by investment companies and other qualifying
activities not currently covered.
(b) Remove distinction between trades, professions
and vocations for plant and machinery allowances.
(c) Align deadlines for elections under
for example sections 77 and 78(2) CAA 1990 with self assessment
time limits for amending returns.
(d) Legislate the Inland Revenue's Statement
of Practice 1/86 (which sets out guidelines for making and handling
short-life asset elections especially on large numbers of identical
assets).
(e) Use consistent definitions throughout
the Taxes Acts for things such as cars.
(f) Provide that poultry cages are unaffected
by the rule in Schedule AA1 CAA 1990 which says that expenditure
on buildings and structures is not expenditure on plant or machinery.
(g) Extend relief for fire safety expenditure
to premises which are not yet in use.
INDUSTRIAL BUILDINGS
ALLOWANCES
(h) Extend allowances for buildings used for welfare
of workers to include buildings used by all employees of a qualifying
trade not just productive workers.
(i) Extend allowances for qualifying sports
pavilions to those occupied by persons carrying on a profession
and used for the welfare of employees of that profession.
(j) Make simpler the legislation relating
to Enterprise Zone Allowances.
(k) Provide a statutory definition of a
member of his family or household.
(l) Where a building is sold subject to
a subordinate interest allow the buyer the calculate the residue
of qualifying expenditure by deducting only the balancing allowance
actually made. (See clause 325(7) and also item (p) below.)
AGRICULTURAL BUILDINGS
ALLOWANCES
(m) Agricultural buildings allowances are used by a comparatively
small part of the economy which does not justify a different set
of rules from those governing industrial buildings.
(n) Provide for apportionment of expenditure
where there is an acquisition of part of the related agricultural
land before the first use of an agricultural building.
(o) Simplify the computation of balancing
allowances by basing it on the residue of expenditure.
(p) Where a building is sold subject to
a subordinate interest allow the buyer the calculate the residue
of qualifying expenditure by deducting only the balancing allowance
actually made. (See clause 389(7) and also item (1) above.)
MINERAL EXTRACTION
ALLOWANCES
(q) Provide for explicit relief for expenditure on successful
planning applications.
PATENT ALLOWANCES
(r) Provide for balancing allowances to be available
before a trade ceases if an individual patent is disposed off
for less than the unrelieved qualifying expenditure on it.
(s) Widen the availability of relief for
excess non-trade patent allowances.
SUPPLEMENTARY PROVISIONS
(t) Make clear whether "capital expenditure"
and capital sum include non-monetary consideration eg shares.
4. STRUCTURE OF EXISTING LEGISLATION RELATING
TO CAPITAL ALLOWANCES AND STRUCTURE OF CAPITAL ALLOWANCES BILL
24 January 2001
5. CLAUSES IN THE CAPITAL ALLOWANCES BILL
WHICH ARE COVERED BY THE WAYS AND MEANS RESOLUTION
24 January 2001
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