CH 10 - Capital allowances - First-Year & AIA

Question 1

which types of expenditure
attract
FYA’s @ 100%

Answer 1

• P&M for an electric vehicle chargin points
• P&M installed at a gas refueling station
  (used to refule vehicle with natural gas, biogas or hydrogen fuel e.g. storage tanks, compressors, pumps and any equip. for dispensing the gas)
• electrically propelled cars of CO2 0g/km & (before 1.1.2021 up to 50g/km)
• zero emisions goods vehicles
• R&D incurred by trader (incl. P&M, building used for R&D, excluding land)

*for expenditure incurred up to 5.4.2025

Question 2

What is AIA limit from 1.1.2019
&
rate for WDA for GP & SRP

Answer 2

Limit is £1million

18% on general pool

6% in special rate pool

CAA 2001, ss.104A, 104C and 104D

Question 3

List restrictions of AIA

Answer 3

• only one AIA is available for each business each year
• sole trader business & partnership will both receive AIA
• only one AIA is available when two are related trading activities or carried on from the same premieses (allocation is available between as they wish)
• partnerships with company as a partner are not eligible for AIA
• no AIA or 100% FYA is available on P&M from connected person

Question 4

Who is
connected person

Answer 4

• the individual’s spouse/civil partner;
• a ‘relative’ of the individual or the individual’s spouse/civil partner;
• the spouse/civil partner of the relative of the individual;
• the spouse/civil partner of the relative of the individual’s spouse/civil partner.

‘Relative’ means brothers, sisters, ancestors (ie parents, grandparents etc) or lineal descendants (ie children, grandchildren etc).

• The trustee of a settlement is connected with any individual who is a settlor in relation to the settlement.
• A partner in a partnership is connected with both the other partners and the spouse/civil partner of the other partners.
• A company is connected with an individual if they alone or together with someone connected to them control the company.
• A company is connected with another company if one controls the other or they are both under common control. CAA 2001, s.575

CAA 2001, ss.214 and 217