| Commentary

18.3 Loss relief

| Commentary

18.2 Capital allowances

In calculating the profits of a trade, no deduction may be made for items of a capital nature1. This causes some problems in relation to depreciation of wasting assets, such as plant and machinery, which will often appear as revenue or income expenses in the accounts of a business. Fortunately, certain deductions are allowed for depreciation under the capital allowances regime2. The main types of allowance are in relation to plant and machinery3 and industrial buildings4.

In relation to plant and machinery, allowances are generally granted to a person who carries on a qualifying activity, which includes a trade5, and incurs qualifying expenditure, which

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