18 March 2015
Budget 15 - Update
Little
changed for capital allowances purposes following George Osborne’s last budget
in this parliament. The Chancellor did,
however, confirm that the current generous Annual Investment Allowance - which
currently allows up to £500,000 of qualifying capital expenditure to be fully
relieved in the year in which expenditure is incurred – will end in 31 December
2015. This was already on the cards and
is due to go back down to the considerably smaller £25,000. The only thing that the Chancellor did say
was that the £25,000 limit would be too low to be useful, but he would not
commit to the new limit. This
does make medium term planning for capital investment tricky as it will be
unknown whether qualifying expenditure will attract relief at 8/18% or
100%. To take full advantage of the
current generous allowance, investment in qualifying plant & machinery
should be planned and made before the end of 2015. The
only other measure confirmed in the budget is the anti-avoidance rules which
came into force on 26 February 2015.
These relate to transactions between connected parties or sale &
leaseback transactions where the person disposing of the asset does not bring a
disposal value into account and the connected person acquiring the asset does
not incur capital expenditure. The
restriction means that the person acquiring the asset is treated as having no
qualifying expenditure.
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