BIM52775 - Care providers: Foster carers: capital allowances

Capital allowances are not available where the profit from foster care is calculated by reference to the exempt amounts.

When a foster carer’s profit changes from being calculated on an accounts basis, to being calculated using the exempt amounts, for the purpose of capital allowances only there is a deemed cessation of trade. The pool is deemed to have been disposed of for the tax written down values. No balancing charges, or balancing allowances, arise.

When a foster carer’s profit changes from being calculated using the exempt amounts, to being calculated on an accounts basis, plant and machinery are brought into the pool at market value.