A sole trader bought a property. The parties agreed a £45 000 capital allowances s 198 election for plant and machinery fixtures. For the election the seller insisted on describing the fixtures as ‘all the plant and machinery which may or may not be in the property’. The buyer claimed £45 000 of allowances. However HMRC has challenged this on the grounds that the election does not adequately identify the fixtures. If that is correct the outcome is that the buyer is being denied £45 000 of capital allowances. Also how does this affect the seller?
Answer
The buyer is right to be concerned about the election wording...
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A sole trader bought a property. The parties agreed a £45 000 capital allowances s 198 election for plant and machinery fixtures. For the election the seller insisted on describing the fixtures as ‘all the plant and machinery which may or may not be in the property’. The buyer claimed £45 000 of allowances. However HMRC has challenged this on the grounds that the election does not adequately identify the fixtures. If that is correct the outcome is that the buyer is being denied £45 000 of capital allowances. Also how does this affect the seller?
Answer
The buyer is right to be concerned about the election wording...
If you are not a subscriber, subscribe now to read this content.
concerned about the election wording...
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