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Tax Insider Tip: Write Off Small Pools

8th Dec 2014
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The small pools allowance allows you to write off the main or special rate pool or both if the balance on the pool in question is £1,000 or less. This clears the pool in one hit and prevents the need to make minimal capital allowance claims over a number of years.

The small pools allowance can be claimed in respect of new expenditure (usually that remaining after other allowances have been claimed), any brought forward residual balance, less any disposal proceeds of assets which have been sold or otherwise disposed of.

The £1,000 small pools allowance is proportionately reduced for periods of less than 12 months.

Example:
Helen incurs expenditure in excess of her AIA limit. The unrelieved balance of £800 is added to her main pool. There is no residual balance bought forward.

As the balance on the pool is less than £1,000, Helen claims the small pools allowance, claiming a writing down allowance for the full £800.

The balance on the main pool is reduced to nil.

This is a sample tip taken from our 136 page guide:
101 Ultimate Tax Strategies Revealed.

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