The Government today published its Policy paper; Finance Bill 2016, Overview of legislation in draft.
Updated for the 10th of December it includes Capital Allowances specific points on Enterprise Zones, and a reform of the Wear & Tear allowance.
On the introduction of additional Enterprise Zones in 2012, the Summer Budget 2015 invited local bids for new Zones. Autumn Statement confirmed that secondary legislation will be introduced to establish 26 new Zones, ten of which will provide for enhanced capital allowances for qualifying expenditure. The enhanced capital allowances will be available for expenditure incurred on or after 25 November 2015.
On the reform of the Wear and Tear Allowance is stated that when announced at Summer Budget 2015, legislation will be introduced in Finance Bill 2016 to repeal the Wear and Tear allowance and make new provision for a deduction for the replacement of furnishings. This follows the public consultation over summer 2015. The deduction will be available in calculating the profits of a property business which includes a dwelling-house. The deduction is available for expenditure on furniture, furnishings, appliances (including white goods) and kitchenware, where the expenditure is on a replacement item provided for use in the dwelling. The deduction given will be for the cost of a like-for-like, or nearest modern equivalent, replacement asset, plus any costs incurred in disposing of, or less any proceeds received for, the asset being replaced. The deduction will be available for expenditure incurred on or after 1 April 2016 for corporation tax payers and 6 April 2016 for income tax payers. This deduction will not be available for furnished holiday lettings because capital allowances will continue to be available for them. A summary of responses to the public consultation was published on 9 December 2015.
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Thanks – Arthur