Capital allowance apportionment apportions deductions between predecessor and successor based on days in the financial year. When a business reorganisation occurs during a financial year, the full-year capital allowance is apportioned between predecessor and successor using a pro rata formula. The deduction for each party is A x B/C where A is the deduction as if no reorganisation occurred; B is the number of days of the party's ownership period in the financial year (predecessor: start to day before reorganisation; successor: date of reorganisation to year-end); and C is the total number of days in that financial year.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Capital allowance apportionment apportions deductions between predecessor and successor based on days in the financial year.
When a business reorganisation occurs during a financial year, the full-year capital allowance is apportioned between predecessor and successor using a pro rata formula. The deduction for each party is A x B/C where A is the deduction as if no reorganisation occurred; B is the number of days of the party's ownership period in the financial year (predecessor: start to day before reorganisation; successor: date of reorganisation to year-end); and C is the total number of days in that financial year.
Full Summary is available for active users!
Note: It is a system-generated summary and is for quick reference only.
TaxTMI 
of 
Join Channel
TaxTMI 
