capital allowances

a standardized method of giving relief for depreciation for tax purposes, only available for certain classes of capital expenditure. The most common qualifying categories of expenditure are on plant and machinery, industrial buildings and on agricultural buildings and works. Depreciation in the accounts is disallowed for tax purposes and is replaced by capital allowances on those assets which qualify. In order to encourage businesses to invest, there are sometimes generous rates of allowance in the period of acquisition (initial allowances or first-year allowances). Any remaining expenditure which has not been relieved is given by means of a writing down allowance at a specified percentage rate per annum. On a disposal, a comparison is made between the disposal value and the tax written down value so that an adjustment can be made to ensure that the total relief equals the reduction in value while the person owned the asset. If too little relief has been given, a balancing allowance is provided and where too much relief has been given, the excess is added to income and is called a balancing charge.

capital allowances

Capital Allowances

A reduction in a company's corporate tax in order to encourage it to make capital investments. In general, when a company buys capital assets or makes some other long term investment, its corporate taxes are reduced by some amount over and above what the depreciation on the asset would have been. This amount is called the capital allowance.

capital allowances

standard allowances, for TAXATION purposes, against expenditure on FIXED ASSETS by a firm in lieu of DEPRECIATION. In the UK currently (as at 2004/05) a 25% ‘writing-down allowance’ against tax is available for firms which invest in new plant and equipment. Additionally in the case of small and medium-sized firms a 40% ‘first year allowance’ is available for INVESTMENT in new plant and equipment and a 100% tax write-off (for the three year period 2000/03) for investment in computers and e-commerce. A business may choose its own rates of depreciation for fixed assets which may differ from the statutory capital allowances. Capital allowances may also be varied by the government to encourage or discourage capital INVESTMENT. See DEPRECIATION, CORPORATION TAX.

capital allowances

‘write-offs’ against CORPORATION TAX when a FIRM invests in new plant and equipment. In the UK currently (as at 2004/05) a 25% ‘writing-down allowance’ against tax is available for firms that invest in new plant and equipment. Additionally, in the case of small and medium-sized firms, a 40% ‘first-year allowance’ is available for investment in new plant and equipment and a 100% tax write-off for investment in computers and e-commerce.

Capital allowances are aimed at stimulating investment, thereby increasing the supply-side capabilities of the economy and the rate of ECONOMIC GROWTH. See CAPITAL GOODS, DEPRECIATION 2.

单词	capital allowances
释义	capital allowances capital allowances a standardized method of giving relief for depreciation for tax purposes, only available for certain classes of capital expenditure. The most common qualifying categories of expenditure are on plant and machinery, industrial buildings and on agricultural buildings and works. Depreciation in the accounts is disallowed for tax purposes and is replaced by capital allowances on those assets which qualify. In order to encourage businesses to invest, there are sometimes generous rates of allowance in the period of acquisition (initial allowances or first-year allowances). Any remaining expenditure which has not been relieved is given by means of a writing down allowance at a specified percentage rate per annum. On a disposal, a comparison is made between the disposal value and the tax written down value so that an adjustment can be made to ensure that the total relief equals the reduction in value while the person owned the asset. If too little relief has been given, a balancing allowance is provided and where too much relief has been given, the excess is added to income and is called a balancing charge. capital allowances Capital Allowances A reduction in a company's corporate tax in order to encourage it to make capital investments. In general, when a company buys capital assets or makes some other long term investment, its corporate taxes are reduced by some amount over and above what the depreciation on the asset would have been. This amount is called the capital allowance. capital allowances standard allowances, for TAXATION purposes, against expenditure on FIXED ASSETS by a firm in lieu of DEPRECIATION. In the UK currently (as at 2004/05) a 25% ‘writing-down allowance’ against tax is available for firms which invest in new plant and equipment. Additionally in the case of small and medium-sized firms a 40% ‘first year allowance’ is available for INVESTMENT in new plant and equipment and a 100% tax write-off (for the three year period 2000/03) for investment in computers and e-commerce. A business may choose its own rates of depreciation for fixed assets which may differ from the statutory capital allowances. Capital allowances may also be varied by the government to encourage or discourage capital INVESTMENT. See DEPRECIATION, CORPORATION TAX. capital allowances ‘write-offs’ against CORPORATION TAX when a FIRM invests in new plant and equipment. In the UK currently (as at 2004/05) a 25% ‘writing-down allowance’ against tax is available for firms that invest in new plant and equipment. Additionally, in the case of small and medium-sized firms, a 40% ‘first-year allowance’ is available for investment in new plant and equipment and a 100% tax write-off for investment in computers and e-commerce. Capital allowances are aimed at stimulating investment, thereby increasing the supply-side capabilities of the economy and the rate of ECONOMIC GROWTH. See CAPITAL GOODS, DEPRECIATION 2.
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