Capital allowances and connected persons
Produced in partnership with Martin Wilson
Capital allowances and connected persons

The following Tax practice note Produced in partnership with Martin Wilson provides comprehensive and up to date legal information covering:

  • Capital allowances and connected persons
  • Definition of connected persons
  • Individuals
  • Settlements
  • Companies
  • Transfer of assets
  • Plant and machinery
  • Integral features
  • Structures and buildings

Provisions exist to ensure, generally, that assets may not be transferred between connected persons in such a way as to accelerate capital allowances by means of the annual investment allowance or first-year allowances, or in such a way as to artificially inflate the amount on which allowances can be claimed.

This Practice Note describes how connected persons are defined by the capital allowances rules and how those rules apply when assets are transferred between connected persons. For information on an election for alternative treatment that may be made on a transfer of a trade between connected persons, see Practice Note: Capital allowances and company reconstructions—Transfer of a trade between connected persons.

For a general explanation of how capital allowances for plant and machinery are calculated, including the meanings of the terms annual investment allowance, first-year allowances, disposal value and writing down allowance, see Practice Notes: How plant and machinery allowances are claimed—income tax and How plant and machinery allowances are claimed—corporation tax.

For an explanation of the calculation of allowances for structures and buildings, see Practice Note: Structures and buildings allowances.

Definition of connected persons

Individuals

An individual (A) is connected with a person (B) if:

  1. A is B’s spouse or civil partner

  2. A is a relative of B

  3. A is the spouse or civil partner of a relative of B

  4. A is a relative of B’s spouse or civil

Related documents:

Popular documents