Capital Allowances on Property

Information about Capital Allowances on Property

Published on August 8, 2014

Author: SheriePSmith



Understanding Capital Allowances on Property: Understanding Capital Allowances on Property The business world can be a pretty complicated one especially for someone who might not have the faintest idea of the many processes involved in this field. One such concept that many people might have a hard time understanding is capital allowances on property . So what exactly is capital allowance anyway? For starters, a capital allowance is defined as any deduction that you or your company is allowed to claim. The “claim” in question here involves the wear and tear of any fixed assets that could have either been bought or used in your specific business or trade. Capital allowances are not deductible by income property taxes because they are given in place other capital expenditures and depreciation. It is worth noting that capital allowances can only be claimed for whatever assets your business or company might be spending on. The assets in question must be owned or operated by your business. This is only possible if you are able to meet certain conditions first. The cost of the properties that your business purchases as a part of its trade cannot be claimed on capital allowances. These items should instead be included in your business expenses when you are trying to work out your trading profits. Most cases will not allow you to claim capital allowances on the purchase prices of such investments like land, buildings, and property. For example, if you bought a piece of equipment for one of your factories, but only to find out that it had no real use for it, then you will be unable to claim any capital allowances against that property. Simply put whatever properties that you purchase must be used in whatever trade or business you are involved in. If you are a trader who has an R & D (Research & Development) department that relates to the trade that your business is involved with, and meets other certain conditions, then you will be eligible for a property allowance. The equipment that you use such as tools, machinery, and even office equipment can all have capital allowances claimed against them. For more information on capital property allowances, you can visit

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