Joint Committee on Tax Simplification Bills Minutes of Evidence



APPENDIX 1

Changes suggested in response to Exposure Drafts Nos 3, 5, 7 and 9 and the draft Capital Allowances Bill

PLANT AND MACHINERY ALLOWANCES
  (a)  Extend sections 83A (Gifts in kind to charities etc) and 84 ICTA (Gifts to educational establishments) to gifts of plant or machinery by investment companies and other qualifying activities not currently covered.

  (b)  Remove distinction between trades, professions and vocations for plant and machinery allowances.

  (c)  Align deadlines for elections under for example sections 77 and 78(2) CAA 1990 with self assessment time limits for amending returns.

  (d)  Legislate the Inland Revenue's Statement of Practice 1/86 (which sets out guidelines for making and handling short-life asset elections especially on large numbers of identical assets).

  (e)  Use consistent definitions throughout the Taxes Acts for things such as cars.

  (f)  Provide that poultry cages are unaffected by the rule in Schedule AA1 CAA 1990 which says that expenditure on buildings and structures is not expenditure on plant or machinery.

  (g)  Extend relief for fire safety expenditure to premises which are not yet in use.

INDUSTRIAL BUILDINGS ALLOWANCES
  (h)  Extend allowances for buildings used for welfare of workers to include buildings used by all employees of a qualifying trade not just productive workers.

  (i)  Extend allowances for qualifying sports pavilions to those occupied by persons carrying on a profession and used for the welfare of employees of that profession.

  (j)  Make simpler the legislation relating to Enterprise Zone Allowances.

  (k)  Provide a statutory definition of a member of his family or household.

  (l)  Where a building is sold subject to a subordinate interest allow the buyer the calculate the residue of qualifying expenditure by deducting only the balancing allowance actually made. (See clause 325(7) and also item (p) below.)

AGRICULTURAL BUILDINGS ALLOWANCES
  (m)  Agricultural buildings allowances are used by a comparatively small part of the economy which does not justify a different set of rules from those governing industrial buildings.

  (n)  Provide for apportionment of expenditure where there is an acquisition of part of the related agricultural land before the first use of an agricultural building.

  (o)  Simplify the computation of balancing allowances by basing it on the residue of expenditure.

  (p)  Where a building is sold subject to a subordinate interest allow the buyer the calculate the residue of qualifying expenditure by deducting only the balancing allowance actually made. (See clause 389(7) and also item (1) above.)

MINERAL EXTRACTION ALLOWANCES
  (q)  Provide for explicit relief for expenditure on successful planning applications.

PATENT ALLOWANCES
  (r)  Provide for balancing allowances to be available before a trade ceases if an individual patent is disposed off for less than the unrelieved qualifying expenditure on it.

  (s)  Widen the availability of relief for excess non-trade patent allowances.

SUPPLEMENTARY PROVISIONS
  (t)  Make clear whether "capital expenditure" and capital sum include non-monetary consideration eg shares.



4. STRUCTURE OF EXISTING LEGISLATION RELATING TO CAPITAL ALLOWANCES AND STRUCTURE OF CAPITAL ALLOWANCES BILL


24 January 2001



5. CLAUSES IN THE CAPITAL ALLOWANCES BILL WHICH ARE COVERED BY THE WAYS AND MEANS RESOLUTION

24 January 2001


 
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