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Capital allowances on transfer of fixed assets between group companies

Capital allowances on transfer of fixed assets...

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If Company A sells some p & m to its holding company, and has claimed AIA on the assets. What are the capital allowance consequences of the sale to the holding company, i.e can the holding co claim AIA and will the subsidiary need to adjust for the disposal proceeds?

I appreciate other assets are transferred at NGNL, but is this the same for assets which qualify for CA's? So no AIA can be claimed, and no disposal proceeds will be entered on subsidiary tax comp?

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27th Jul 2012 11:27

More info needed

What will the holding company be doing with the assets? It using them for its own trade, it can claim allowances. If it is leasing them back to the subsidiary, it can claim allowances.

In either case, only WDA - no AIA - is available to holding company. And the consideration for the transfer - whatever that consideration is - forms the disposal proceeds and acquisition cost respectively.

The above assumes that the subsidiary is not transferring its trade to the holding company, in which case a TWDV election may be in point.

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By Jigs
27th Jul 2012 19:13

Thanks for the replay, the trade will not be transferred. It is more an attempt to protect the assets by transferring them to its holding company.

Would really appreciate it if you could refer me to where abouts these rules are in the legislation?

Thanks again

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