TAX – May 2018 – L2 – Q5b – Tax Administration and Enforcement

Explain briefly conditions for granting capital allowances.

Question

Explain briefly THREE conditions for granting capital allowances.

Answer

Capital Expenditure Incurred: Capital expenditure must have been incurred in the basis period.
Usage for Trade or Business: The qualifying capital expenditure must have been put into use for the purpose of trade or business by the taxpayer.
Ownership: Ownership over the assets must not be in dispute, ensuring that the taxpayer has legal ownership of the qualifying assets.