Steven Bone is a director at tax incentives specialists, Gateley Capitus. Previously he held senior specialist positions in major and mid-tier accountancy firms. He is a tax-qualified chartered surveyor and specialises in capital allowances and related property tax reliefs. Email: [email protected]; tel: 020 7653 1777 or 07923 212519.
IBAs one-quarter reduction To answer the original question by Adrian. His taxpayer would in the first instance be able to claim at 6.67% (i.e. the residue of expenditure over 15 years). Once the restriction starts to bite the rate will reduce by one-quarter each year. So in April 2008 it will reduce to 5%, in 2009 it will be 3.34%, in 2010 it will be 1.67% and thereafter nil (after April 2011 there will be no tax relief given for any residue of expenditure that has not already been written off).
Steven Bone The Capital Allowances Partnership LLP (www.cap-allow.com) Co-author of 'Tottel's Capital Allowances: Transactions & Planning' and Tolley's Handbook on The Capital Allowances Act 2001
My answers
IBAs one-quarter reduction
To answer the original question by Adrian. His taxpayer would in the first instance be able to claim at 6.67% (i.e. the residue of expenditure over 15 years). Once the restriction starts to bite the rate will reduce by one-quarter each year. So in April 2008 it will reduce to 5%, in 2009 it will be 3.34%, in 2010 it will be 1.67% and thereafter nil (after April 2011 there will be no tax relief given for any residue of expenditure that has not already been written off).
Steven Bone
The Capital Allowances Partnership LLP (www.cap-allow.com)
Co-author of 'Tottel's Capital Allowances: Transactions & Planning' and Tolley's Handbook on The Capital Allowances Act 2001