Commentary

B2.412 Capital expenditure

Business tax
Business tax | Commentary

B2.412 Capital expenditure

Business tax | Commentary

B2.412 Capital expenditure

No sum may be deducted for trading purposes in respect of capital expenditure (see B2.401)1. The revenue or capital nature of a payment is fixed at the time of its receipt2.

There is no statutory test to apply when deciding whether a particular item of expenditure should be treated as capital or revenue for the purposes of calculating trading profit. Detailed analysis of the various tests that have evolved through case law can be found in Division B2.3A.

Where profits are calculated on the cash basis, (see B2.112) these provisions

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