This guidance applies for accounting periods beginning on
or after 1st January 2005
Where profits and losses of a business are calculated in a
currency other than sterling, capital allowances on plant and
machinery are also calculated in that currency. This is because
capital allowances are deducted in computing the profit for
corporation tax purposes under CAA01/S2 (1)(b).
Where the Capital Allowances Act 2001 refers to a specific
monetary limit in sterling, for example the £12000 limit for
expensive cars, this should be translated into the functional
currency at the spot rate applying on the date of acquisition of
the car (FA1993/92B(3) and 92C(4)).
This treatment of capital allowance is unchanged from that
applying for periods beginning before 1 January 2005 – see
the example at
CFM10530.
