Chapter 8 - Capital Allowance Definitions

Question 1

Plant and Machinery

Answer 1

An asset with an expected life of two years or more. Must fulfil a function in the trade

Question 2

Buildings

Answer 2

Setting in which the business will be carried on and will not qualify as a plant.

Question 3

Structures and Land

Answer 3

Don’t qualify as plant

Question 4

List A and B

Answer 4

Tell us what is meant by Buildings (A) and Structures and Land (B). Neither qualify as plant and machinery, ergo don’t qualify for CA’s

Question 5

List A

Answer 5

• Walls, floors, ceilings, doors, gates, shutters, windows, stairs
• Mains services and systems for water, electricity and gas
• Waste disposal systems
• Sewerage and drainage systems
• Shafts and other similar structures
• Fire safety systems
  All classes as building expenditure and don’t qualify as P&M ergo don’t qualify for CAs

Question 6

List B

Answer 6

• Tunnel, bridge, viaduct etc
• Pavement, road, car park
• Canal or basin
• Dam, reservoirs etc
• Docks, harbours, wharfs
• Dikes and seas walls
  All don’t qualify as plants and therefore don’t get CAs

Question 7

List C

Answer 7

Extra items that do qualify for CA’s:

• Partition/movable walls
• Decorative assets for enjoyment of the public in hotel, restaurant or similar trades
• Swimming pools - diving boards and slides included

Question 8

Additional Qualifying Plant and Machinery Spend

Answer 8

• Altering building for purpose of installing P&M
• Demolition costs
• Thermal Insulation of buildings

Question 9

Integral Features

Answer 9

Integral features qualify as P&M. This includes:

• Lifts, escalators, moving walkways
• Space heating systems
• Air con
• Hot and cold water systems (not toilet or kitchen)
• Electric lighting and power systems
• External solar shading