First Year Allowances

[Richard J]

I am thinking of buying a business. I have been advised by a friend who has recently bought a businesss that his accountant told him that he could not claim first year allowances on the fixtures and fittings element of the price, but could claim 25% per year. This was due to it being a succession / going concern.

I have researched this on the internet but cannot find anything to confirm this. Any help would be gratefully recieved!

[Lambs]

R,

I would agree that First Year Allowances are not available where the transaction is between connected parties - e.g. a succession, but I am not sure if 'going concern' is relevant.

I should think that, broadly speaking, you would be eligible for FYAs as the buyer, provided you are not connected with the vendor. However, there are various anti-avoidance measures which you should bear in mind, and you must ensure that you are otherwise eligible for FYAs in the first place.

This is just one of many aspects to consider when reviweing the potential acquisition of a business: I trust you will consult fully with a suitably qualified professional, in advance of coming to any decision.

Regards,

Lambs

[Tax Practice]

Richard J

I would agree with Lambs that FYA are not available. Please try the following link to the Revenue & Customs website. It has a helpful example.

http://www.hmrc.gov.uk/manuals/camanual/CA29030.htm

I hope that helps.