Page 29 - Capital Allowances Recoupments Part 1 (CTA)

Recoupment [s 13(3)]

- Annual allowance subject to s 8(4)(a) unless TP elects that

recoupment should not be included in income.

- Recoupment is tne set off against the cost of the “new”

building, if the TP:

→ Purchases or erects further building within 12 months from the

date of disposal of the previous building and

- Further building purchased or erected qualifies for the annual

allowance under s 13(1) (in other words also used wholly or

mainly in a process of manufacture).

Proviso: No annual allowance on the part of the cost which

qualified for a deduction under section 11(g) for leasehold

Improovements. Choice between s 13(1) and s 11(g) or

A combination of both?→ See later under sections on leases.