Capital allowances ― groups and connected persons

Produced by Tolley in association with Martin Wilson and Steven Bone
Capital allowances ― groups and connected persons

The following Owner-Managed Businesses guidance note Produced by Tolley in association with Martin Wilson and Steven Bone provides comprehensive and up to date tax information covering:

  • Capital allowances ― groups and connected persons
  • Definition of connected persons
  • Individuals
  • Settlements
  • Partnerships
  • Companies
  • Transfer of assets between connected persons
  • Plant or machinery
  • Assets other than machinery and plant
  • Election by connected persons

Many provisions relating to capital allowances are disapplied or varied where the parties to a transaction are connected.

Definition of connected persons

Individuals

An individual is connected with a person if that person is:

  1. the individual’s spouse / civil partner

  2. a relative

  3. the spouse / civil partner of a relative of the individual or of the individual’s spouse / civil partner

‘Relative’ means a brother, sister, ancestor or lineal descendant. ‘Lineal descendant’ will include any descendant of the spouse by a previous marriage though not a later marriage.

Settlements

A trustee of a settlement is connected with:

  1. any individual who is a settlor in relation to that settlement

  2. any person who is connected with that settlor

  3. a body corporate which is deemed to be connected with that settlement

A body corporate is deemed to be connected with a settlement in any year of assessment if at any time in that year:

  1. it is a close company (or only not a close company because it is not resident in the UK) and the participators then include the trustees of the settlement, or

  2. it is controlled (within the meaning of CTA 2010, s 1124 by a company falling as above)

Partnerships

Except in relation to acquisitions or disposals of partnership assets pursuant to bona fide commercial arrangements, a person is connected with any person with whom he is in partnership, and with the spouse / civil partner or relative of any individual with whom he is in partnership.

Companies

A company (including any body corporate or unincorporated association) is connected with another company if either:

  1. the s

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