New rules concerning capital allowances on the disposal of fixtures (first announced in 2011) are now in full force. The changes, which are procedural and impose additional formalities, are:
- Mandatory pooling (which came into effect in April 2014); and
- The fixed value requirement (“FVR”) (which came into effect in April 2012).
Nevertheless, the old rules continue to apply. The basic aim is to limit plant and machinery allowances on fixtures (“PMAs”) to the original cost incurred and to prevent double claims on expenditure on the same fixture.
In particular, the problems with the old system were that:
- The parties did not necessarily agree a single disposal/acquisition value; and
- Late pooling by the buyer made it difficult to track information on a previous owner’s claims.
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