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AIA - is this a mixed partnership?

AIA - is this a mixed partnership?

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Good afternoon all,

I have a partnership initially consisting only of individuals, made up accounts for the year ended 30 April 2012 which are reportable for tax for the fiscal year ended 5 April 2013.

During the year ended 30 April 2012 fixed asset additions with the potential to claim, say, £50k AIA.

However, on 1 May 2012 a company [and as it happens a trust also] was appointed a partner in the business.

My thoughts... for the chargeable period ended 30 April 2012 the partnership consisted only of individuals meaning a claim to the AIA is valid but, does the mixed partnership status attached to the fiscal year ended 5 April 2013 curtail this?

I would hope not given CA2001 is explicit that allowances are calculated by reference to chargeable periods but, does anyone else have a view?

With thanks in anticipation!

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By Steve Kesby
20th Nov 2013 09:54

Neither are relevant

Neither the year end, nor the tax year that it is assessed in are relevant per se.

An AIA is available on all AIA qualifying expenditure. AIA qualifying expenditure is, per CAA 2001, s 38A, all expenditure incurred on or after 6 April 2008 by a qualifying person.

A mixed partnership isn't a qualifying person, but a partnership comprised wholly of individuals is a qualifying person.

So it's the time that the expenditure is incurred that's important. If it is incurred at a time when the partnership is a qualifying person, then it's AIA qualifying expenditure and an AIA is available, regardless of what happens subsequently.

So in this particular case, the year end does have relevance in that the partnership is a qualifying person up to and including 30 April 2012, so all expenditure to that date is eligible for AIA.

From 1 May 2012 onwards it isn't a qualifying person and can't claim AIA on any expenditure from that date onwards.

If the corporate partner hadn't come in until, say, 1 July 2012, then the expenditure from 1 May 2012 to 30 June 2012, in the year to 30 April 2013, would also have been eligible for AIA.

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