IFM09360 - Taxation of investors: Capital Allowances
As RIFs are transparent for the purposes of tax on income and are not themselves persons within the charge to tax, it is the participants in a RIF who will be entitled to any capital allowances due. However, as is the case for operators of CoACS, it is the operator of a RIF who will hold the information which investors require to calculate their entitlement to capital allowances.
The rules in the Capital Allowances Act 2001 have therefore been amended by Regulations 55 and 56 so that they work in a similar way for participants in RIFs as they do for participants in CoACS. This includes the provision of an elective simplified basis of calculating plant and machinery allowances whereby the operator of a RIF may elect to calculate the allowances and allocate them to investors. The guidance applicable to CoACS in HMRC manual IFM08300 contains further details.