Taxation In Jersey - Capital Allowances

The charge for depreciation of fixed assets in a branch or subsidiary is not allowed as a deduction in computing the adjusted profits charged to income tax. In its place income tax allowances are granted for expenditure on various assets comprising "plant and machinery" at the rate of 25% computed on a reducing balance basis. This latter term normally covers such items as office furniture and equipment, motor vehicles, machinery, ships and aircraft.

If capital allowances for a year exceed taxable profits, the surplus may be carried forward and added to the allowances for the following year. By concession, the excess allowance may be added to the loss or may be used to create a loss for the purposes of loss relief so that it may be offset against other income assessable in the year or carried back and offset against trading profit. Expenditure incurred before commencing business is generally treated as having been incurred on the first day of trading and, where applicable,