ABSTRACT
To understand the principles of capital allowances, a general knowledge of some key elements of business taxation is required, in particular, the workings of Corporation Tax. The effects that taxation may have upon construction and, conversely, the effects that construction may have upon tax liability, can have a significant impact upon clients. A difficulty in writing on the subject of taxation is the rapidity and frequency with which the law may change. In addition to the availability of capital allowances for a tax payer who has incurred capital expenditure on the construction of owner-occupied buildings, allowances are also available for investment in existing property. Attempts to over-value a possible claim for plant and machinery in order to enhance a tax benefit may be regarded as an attempt to evade rather than avoid taxation.
