Client is buying a violin for his trade that costs £300K. But he can't afford to do it in one go, so a group of friends is buying it via a trust. The plan is that each year our client will buy around 10% of the then-value of the instrument. It's quite a regular technique - the investors get a Capital return and our girl gets to play a great fiddle.
Where would this stand for AIA purposes? I'd like to think that she can claim AIA on the first £25K of each year's part-purchase and can't find that the legislation has anything in there speaking about part-purchase. However, it talks about buying equipment/machinery and what's being bought here are shares in the trust that owns the fiddle. Is that an impediment
And yes I know that relentless claiming of AIA will set the girl up for a hideous Balancing Charge on cessation/sale and there'll be a messy CGT comp to deal with. Eyes wide open, pray for 20 years of inflation and just claim 40% is my motto here.
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Without knowing exactly how the arrangement will operate...
... it's hard to comments specifically, but I'd have thought that there would either be a leasing business within the trust vehicle and it would be up to the trust to claim any CAs, or it would be provided by the trust to the violinist on an HP type arrangement such that (under S.67 CAA 2001) they are deemed to be the owner of the violin and to have incurred all the expenditure on its provision when they bring it into use in their profession. The latter arrangement seems the more likely and will only give you one AIA.
You need to see some paperwork first
But if structured as a proper shared ownership then I cannot see why not.
Could he not buy it oughtright with a suitably secured loan from the trust and pay no tax at all for a few years?