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David Alexander Keyl v HMRC

In David Alexander Keyl v HMRC (TC03619 – 23 May 2014) the FTT found that a trade had been permanently discontinued so that the annual investment allowance (AIA) was not available.

Mr Keyl had traded as a self-employed air conditioning engineer. On the advice of his accountant he incorporated a company which started trading on 1 April 2009 as his business year end had been 31 March 2009. Mr Keyl claimed AIA in connection with the purchase of a new van in July 2008.

AIA was not available if the expense was incurred in ‘the chargeable period in which the qualifying activity is permanently discontinued’ (CAA 2001 s 38B). HMRC therefore argued that AIA was not available on the purchase of the van as a result of the incorporation of the taxpayer’s business.

Relying in particular on Sethia v John (1947) 28 TC 153 the FTT...

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