Capital allowances are a form of tax-approved depreciation. Depreciation, as calculated is not an allowable deduction in computing the profits. Instead, relief is given by treating the capital allowances as an expense to be deducted when arriving at the taxable trading profits. This document discusses the various types of capital allowances, the rates of allowances applicable for each type allowances, chargeable periods and so on.

Points discussed within this guidance note:

> Introduction

> Capital allowances and partnerships

A  partnership can claim capital allowances on eligible assets which are either owned by the partnership, or owned by an individual partner and used in a trade carried on by the partnership. It is not always easy to tell who is the owner so this note details both ownership structures and how to differentiate.

> Owned by the partnership

> Owned by the partner

> What happens when a partner joins or leaves?

This note details what happens to capital allowances on cessation of partnership or where one partner leaves.

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