»Ê¹ÚÌåÓýapp

Know-how allowances are capital allowances. »Ê¹ÚÌåÓýappy are available on capital expenditure incurred on the acquisition of know-how for use in a trade carried on, or in a trade setup and commenced thereafter, by the person incurring the expenditure. »Ê¹ÚÌåÓýapp allowances are writing down allowances (WDA). »Ê¹ÚÌåÓýappy can only be claimed by traders.

»Ê¹ÚÌåÓýappre are different systems for capital expenditure incurred after 31 March 1986 and capital expenditure incurred before 1 April 1986. »Ê¹ÚÌåÓýappy are described at CA71000 and CA74500.

For capital expenditure incurred after 31 March 1986 the system of WDA for know-how is similar to the system of WDA for plant and machinery. WDA are based on a pool of qualifying expenditure. Balancing allowances and balancing charges may arise just as they can with plant and machinery allowances. »Ê¹ÚÌåÓýappre is a balancing charge if the disposal value brought to account is more than the expenditure in the pool for a chargeable period. »Ê¹ÚÌåÓýappre is one major difference from the machinery or plant system. In the know-how system disposal value is not restricted to original costs.

A balancing allowance can only arise on the permanent discontinuance of the trade. It is the amount by which the pool of qualifying expenditure is greater than the disposal value to be brought to account.