Budget proposals for capital allowances

KEY POINTS

• A new category of structures and buildings allowances reverses to some extent the abolition of industrial building allowances.
• Potentially the allowances will be spread over 50 years leading to onerous record-keeping.
• Punitive anti-avoidance measures are promised if contracts are withdrawn revoked or replaced by a later one.
• The complexity of lease transactions and potential for abuse has led to two new tests.
• The annual investment allowance limit will rise to £1m for two years from 1 January 2019.
• Generally writing down allowances for the special rate pool will reduce from 8% to 6% from April 2019.
• Enhanced capital allowances will cease from April 2020.

Chancellor of the Exchequer Philip Hammond – ‘Fiscal Phil’ to some –...