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AIA claim

Company trading query

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A previously dormant business acquired an investment property on the last day of its accounting period (31 March 2017). Property was subsequently rented out in 2017/18.

Only activity to 31/3/2017 was raising the funds (bank loan, director capital introduced), buying the property and paying a bank arrangement fee.

The company subseqyently had a report commissioned which identified amounts of the purchase price that could be categorised as plant and machinery (the previous owner had not claimed anything in respect of CA's previously)

No CT600 has been submitted. 

A couple of questions

Is AIA claimable on the identified plant and machinery ? Does the trading position affect this ?

No CT600 has been filed, my thought is to put a late return in and claim such allowances as are available to offset against a profit that has been made to 31/3/2018


Thanks in advance


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18th Apr 2018 23:36

No the AIA doesn't apply - it can only be claimed for the accounting period in which the expenditure was incurred. The P&E identified should be added to the normal or special rate pools as appropriate - therefore the trading status has no bearing on the matter.

Subject to the normal rules the company can claim WDAs in the year to 31 March 2018.

Edit. Don't overlook the point made by Ruddles

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By Ruddles
18th Apr 2018 23:21

Why didn’t the previous owner claim CAs? You might find that your client is unable to claim anything.

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19th Apr 2018 09:16

Thanks for the replies

A couple of further points. Building was previously owned by a non tax payer, and the report prepared doesn't mention any doubt about the validity of a claim
No YE 31/3/2017 CT600 has been filed.
Would the activity of purchasing the building a bank chage incurred be sufficient to require one be submitted (with full AIA and late penalty) ?


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By Ruddles
to aj.adams
19th Apr 2018 10:07

Point about previous ownership helps, but it's still not enough - you need to confirm who owned the property and when.

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