Plant after Wimpy
Article Abstract:
There is no statutory definition of what items constitute plant for capital allowance purposes in the UK. The 1989 Wimpy case heard by the Special Commissioners involved disputed capital allowances claims concerning whether certain fixtures were to be considered plant. The disputed items were: shop fronts and door; floors and wall tiles; suspended ceilings; mezzanine and raised floors; light fittings and associated wiring; and fire doors and fire proofing of walls. The Commissioners decided that none of the items, save for lighting fixtures and wiring, were plant. The Wimpy case limits the application of the principle of ambience provided in the 1982 Scottish and Newcastle case by excluding those items that are part of the premises. The main tests on whether items are plant or whether the items retain a separate identity and the completeness of the facility without it. The ramifications of the case are that careful planning during a facility's design phase is necessary for the maximization of the plant capital allowance and proper factual documentation is needed to establish legal entitlement.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1989
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Extracting value from the family company
Article Abstract:
Accountants must make a proper choice of methods to minimize total tax liability for persons attempting to extract value or cash from a family- or closely-held corporation. As a consequence of the UK 1988 Income and Corporation Taxes Act, many companies have substituted dividend payments for salaries in order to avoid National Insurance Contribution liabilities. However, it is generally better to pay a bonus rather than a dividend if the company is taxed at the full or higher marginal rate. It is also better to extract retained profits as a pre-sale dividend rather than through realizing a capital gain. The imminent independent taxation of married couples in 1990 makes it irrelevant whether a wife receives earned or investment income. An owner can transfer shares to a spouse in order to give the spouse dividend income that will be taxed at a lower rate.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1989
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The new kid in town
Article Abstract:
The Capital Allowances Act 2001 is a consolidation of laws on capital allowances and although is criticized by many as lacking in clarity and giving way to much interpretation.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 2001
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