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Capital Allowances Act 2001


153.This Chapter supplements the general rules in section 11 with further provisions about qualifying expenditure.

154.Sections 21 to 25 exclude expenditure on the provision of buildings, structures, land and certain other assets from being expenditure on plant or machinery. They define what is and is not a building for this purpose.

155.Section 26 provides for certain costs of demolishing plant or machinery to be treated as expenditure on the provision of plant or machinery.

156.Sections 27 to 33 allow some special types of expenditure to be qualifying expenditure. These are, broadly, expenditure on:

  • thermal insulation of industrial buildings;

  • fire safety if required by a notice under the relevant legislation;

  • safety at sports grounds if required to comply with a certificate under the relevant legislation; and

  • personal security if there is a special threat to an individual’s security arising from their work.

157.Sections 34 to 38 exclude or restrict some special types of expenditure. These are, broadly, expenditure on:

  • accommodation by MPs and some others;

  • plant or machinery for a dwelling-house for certain qualifying activities;

  • plant or machinery by employees which is not necessary for the performance of their duties;

  • plant or machinery if the depreciation is met in full by subsidies; and

  • production animals subject to a “herd basis” election (see Schedule 5 to ICTA).

158.Other provisions in this Part also treat expenditure as being expenditure on plant or machinery. See in particular Chapter 7 (computer software) and Chapter 18 (additional VAT liabilities and rebates).

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