2.2 Expenditure excluded from AIA

Question 1

What are the five general exclusions?

Answer 1

Expenditure incurred when bis ceases; cars; asset received as gift or bought for other purpose; incurred for ring fence trade & asset bought for sole reason to benefit from AIA.

Question 2

What is a car?

Answer 2

Mechanically propelled road vehicle other than a motorcycle, vehicle for conveying goods and vehicle not commonly used as private vehicle.

Question 3

What is the ownership condition?

Answer 3

AIA not due to a person who incurs expenditure on an a asset but does not own it.

Question 4

What is the prevention of double relief?

Answer 4

May not claim AIA and FYA on same expenditure unless remaining expenditure after AIA.

Question 5

What do the anti-avoidance rules cover?

Answer 5

Denies AIA where a transaction includes connected persons, purpose to obtain AIA where not due & seller continues to use asset i.e sale and lease back.