Who is likely to be affected?
1. Businesses investing more than £50,000 a year in plant or machinery.
General description of the measure
2. Legislation will be introduced in Finance Bill 2010 to double the maximum amount of the annual investment allowance (AIA) from the current limit of £50,000 to a new limit of £100,000.
3. The AIA is currently available to:
• any individual carrying on a qualifying activity (this includes trades, professions, vocations, ordinary property businesses and individuals having an employment or office);
• any partnership consisting only of individuals; and
• any company (subject to the limitations indicated below).
4. Anti-avoidance legislation will also be introduced alongside this change to disallow property loss relief against general income to the extent that the loss is attributable to the AIA. This restriction will apply to losses arising as a result of relevant tax avoidance arrangements (see paragraph 16).
Operative dates
5. The increase will have effect for expenditure incurred on or after 1 April 2010, for businesses within the charge to corporation tax (CT), and on or after 6 April 2010, for businesses within the charge to income tax.
6. The anti-avoidance legislation (described below at paragraph 16) will apply to losses arising as a result of certain arrangements entered into on or after 24 March 2010.
Information from www.hmrc.gov.uk or call us.
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