CH 8 - Capital allowances - Definition

Question 1

When asset qualifies for P&M?

Answer 1

When the asset fulfils a ‘function’ in trade
rather be simply part of the ‘setting’ in which trade is carried on

Question 2

Which expneditures are
NON-QUALIFYING?

Answer 2

Buildings, structures and land

CAA 2001 List A & B s.21 & 22

List C (CAA 2001 s.23) lists items that would qualify

Question 3

What are

Integral Features

Answer 3

Integral features include:
* Lifts, escalators and moving walkways.
* Space heating systems.
* Air conditioning and air cooling systems.
* Hot and cold water systems (excluding toilet and kitchen facilities).
* Electric lighting and power systems.
* External solar shading.

CAA 2001 s.33A

Question 4

What is key case in determinin
when an item is part of premises v plant

Answer 4

J D Wetherspoon plc v Revenue and Customs Commissioners [2012]

preliminary cost - pro rata | cost installing P&M in existing building

unexceptional component - part of the premises (BT pg 71)

Question 5

List items included within
Buildings
List A of CAA 2001 s.21

Answer 5

1. Walls, floors, ceilings, doors, gates, shutters, windows, stairs.
2. Mains services and systems for water, electricity and gas.
3. Waste disposal systems.
4. Sewerage and drainage systems.
5. Shafts or other similar structures.
6. Fire safety systems.

unless on approved List C (s.23 of CAA 2001)

Question 6

List items included within
Structures and Land
List B of CAA 2001 s.22

Answer 6

a. The provision of a structure or other asset in List B.
b. Any works involving the alteration of land.

List B contains the following:
1. Tunnel, bridge, viaduct etc.
2. Pavement, road, car park.
3. Canal or basin.
4. Dam, reservoirs etc.
5. Docks, harbours, wharfs.
6. Dikes and sea walls.

Question 7

List items included within
List C
CAA 2001 s.23

Answer 7

1. Machinery (including devices for providing motive power) not within any other item in this list.
2. Electrical systems (including lighting systems) and cold water, gas and sewerage systems provided mainly—(a) to meet the particular requirements of the qualifying activity, or(b) to serve particular plant or machinery used for the purposes of the qualifying activity.
3. Space or water heating systems; powered systems of ventilation, air cooling or air purification; and any floor or ceiling comprised in such systems.
4. Manufacturing or processing equipment; storage equipment (including cold rooms); display equipment; and counters, checkouts and similar equipment.
5. Cookers, washing machines, dishwashers, refrigerators and similar equipment; washbasins, sinks, baths, showers, sanitary ware and similar equipment; and furniture and furnishings.
6. Lifts, hoists, escalators and moving walkways.
7. Sound insulation provided mainly to meet the particular requirements of the qualifying activity.
8. Computer, telecommunication and surveillance systems (including their wiring or other links).
9. Refrigeration or cooling equipment.
10. Fire alarm systems; sprinkler and other equipment for extinguishing or containing fires.
11. Burglar alarm systems.
12. Strong rooms in bank or building society premises; safes.
13. Partition walls, where moveable and intended to be moved in the course of the qualifying activity.
14. Decorative assets provided for the enjoyment of the public in hotel, restaurant or similar trades.
15. Advertising hoardings; signs, displays and similar assets.
16. Swimming pools (including diving boards, slides and structures on which such boards or slides are mounted).
17. Any glasshouse constructed so that the required environment (namely, air, heat, light, irrigation and temperature) for the growing of plants is provided automatically by means of devices forming an integral part of its structure.
18. Cold stores.
19. Caravans provided mainly for holiday lettings.
20. Buildings provided for testing aircraft engines run within the buildings.
21. Moveable buildings intended to be moved in the course of the qualifying activity.
22. The alteration of land for the purpose only of installing plant or machinery.
23. The provision of dry docks.
24. The provision of any jetty or similar structure provided mainly to carry plant or machinery.
25. The provision of pipelines or underground ducts or tunnels with a primary purpose of carrying utility conduits.
26. The provision of towers to support floodlights.
27. The provision of—
    (a) any reservoir incorporated into a water treatment works, or
    (b) any service reservoir of treated water for supply within any housing estate or other particular locality.
28. The provision of—
    (a) silos provided for temporary storage, or
    (b) storage tanks.
29. The provision of slurry pits or silage clamps.
30. The provision of fish tanks or fish ponds.
31. The provision of rails, sleepers and ballast for a railway or tramway.
32. The provision of structures and other assets for providing the setting for any ride at an amusement park or exhibition.
33. The provision of fixed zoo cages.

CAA2001 s.23, List C