Groups: group relief: meaning of excess capital allowances
Some excess capital allowances can be surrendered and claimed as group relief (CTM80105). The capital allowances concerned are those derived from the qualifying activity of special leasing; allowances which fall to be given under CAA01/S260 (see CA20040 and CA29450). These are the excess of special leasing allowances over the income of qualifying special leasing activities.
That income above is the income before deduction of:
- any losses of any other period, or
- any capital allowances.
CTA10/S101(3) and (4) deal with special leasing allowances that are brought forward:
- the amount to be surrendered is limited to the allowances for the current period, without regard to any allowances brought forward, and
- in calculating the excess of allowances, over the leasing income of the current period, the amount of the income is not reduced by allowances brought forward.
- Excess capital allowances may be surrendered even if the surrendering company has profits against which those allowances could be set – CTA10/S99(2)-(3).
Whether an activity comprises special leasing is a matter of fact but in cases of doubt or difficultly the case should be submitted to a CT Technical Specialist.