Technical CAs question

DeanDean Experienced MentorDevonRegistered Posts: 646
Quiet a subtle point but one that could have a benefit to the client or alternatively a PI position for us.

I'll try to keep it short and sweet:-

Client ceases his Soletradership, disposes of his assets at the TWDV and introduces those assets into his Ltd company. Can the company claim FYA or is it just WDA?

Now I thought it was a WDA but my colleague thinks it's ok for FYA. I thought I had read this scenario on these forums before and if recalling correctly, the WDA route was the advice given.

I've done some hunting and this is how subtle it is;

per CAA2001 s46(2)(a)
"the provision of the plant or machinery on which the expenditure is incurred is connected with a change in the nature or conduct of a trade or business carried on by a person other than the person incurring the expenditure, and" (subsection B, which I won't replicate).

Boils down to the two highlighted words. Our client has no change in trade. Fair enough then, FYA is allowed. What does the legislation mean by conduct?

I would have thought it's by which medium the business is be carried on i.e. ST or LTD. Effectively, like an anti-avoidance provision - connected parties and all that.

Any thoughts?



p.s Forgot to add: I'm saying because the conduct has changed the FYA is removed and only WDA is allowed.


  • DavePDaveP Feels At Home Registered Posts: 79
    My two penneth

    I think you're barking up the wrong tree here!

    You are quoting an anti-avoidance provision and a particularly obscure one at that.

    It basically prevents FYA claims where there is a change in nature/conduct of trade and one of the main purposes of that change is to claim FYAs on assets that otherwise would not be available.

    A change in ownership does not in itself constitute a change in nature or conduct. Nature or conduct is defined in ICTA88/S768(4) as being a change in the type of property dealt in or services or facilities provided in the trade, or a change in customers, outlets or markets of the trade.
  • DavePDaveP Feels At Home Registered Posts: 79
    Oh, and in answer to your question..

    No FYAs on purchases from connected parties.

    CAA 2001 s213-217.
  • DeanDean Experienced Mentor DevonRegistered Posts: 646
    DaveP wrote: »
    No FYAs on purchases from connected parties.

    CAA 2001 s213-217.

    That's what I was after! Knew it was in there somewhere! Thanks!


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