Section 198 Election

Amount fixed by the election.

Section 198 election. To cut a long story short i was engaged to get involved in speaking with the vendor s accountant and after some prolonged questioning it transpired that there had only been a limited claim on the fixtures see chapter 14 of caa2001 for a definition of fixtures within the property. A 198 election is revocable only with the prior written consent of the commissioner. A taxpayer may elect to treat any qualified environmental remediation expenditurewhich is paid or incurred by the taxpayer as an expense which is not chargeable to capital account.

Inadequacy of draft section 198 tax election. This practice note describes the law and practice relating to elections under section 198 or 199 of the capital allowances act 2001 caa 2001 which are relevant to capital allowances claims on fixtures that change hands as part of a real estate transaction a property sale or the grant of a new lease. Section 198 and 199 tax elections where the value of fixtures has been established the parties are free to agree the elected value of those fixtures between the parties via a section 198 tax election agreement for purchases of a section 199 tax election agreement for leases.

Any expenditure which is so treated shall be allowed as a deduction for the taxable year in which it is paid or incurred. All buyers should make section 198 elections. The required information on an s198 election is as follows.

The section 198 agreement was duly amended to show those fixtures which had been subject to a capital allowances claim together with their tax written down value. An election can be made under caa01 s199 where both of the following conditions apply. Section 198 s198 tax election template.

Any expenditure which is so treated shall be allowed as a deduction for the taxable year in which it is paid or incurred. An incoming lessee has paid a premium for an interest in land that includes a fixture. The amount fixed by the election the name of each person making the.

To obtain the commissioner s consent a taxpayer must submit a request for a private letter ruling in accordance with the provisions of rev. An election under caa01 s198 or s199 must be made by notice in writing to hmrc. Section 198 election requirements.