Enterprise zones

Greene, Chris; Maddalena, Christina
February 1992
Accountancy;Feb1982, Vol. 109 Issue 1182, p51
Trade Publication
This article reports that capital allowances position in relation to zones which are close to the expiry of their 10-year life is to be clarified by a legislation in the Finance Bill 1992 in Great Britain. The first proposal is that, where the construction expenditure was incurred during the 10-year life of the enterprise zone, a purchaser who acquires the building unused after the expiry of the life of the zone will be entitled to capital allowances. This confirms the approach the Inland Revenue has taken but, on the basis of recent legal advice, is thought to be incorrect. Until legislation is enacted, the Revenue will continue to apply its existing practice of accepting claims for capital allowances by purchasers in these circumstances on a concessional basis. The concession will also apply to unsettled liabilities of earlier years. The second amendment to the legislation will relax the requirement that the purchaser is entitled to allowances only where it is both unused. Provided the building is acquired within two years of being brought into use, the purchaser will still be entitled to capital allowances. The final proposed version to the legislation is to impose further condition on claims for capital allowances for expenditure incurred under a contract entered into within the 10-year-life of the zone.


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