Capital Allowances Act 2001 Explanatory Notes

Capital Allowances Act 2001

2001 CHAPTER 2

Commentary on Sections

Glossary

Part 2: Plant and machinery allowances

Chapter 3: Qualifying Expenditure

Section 21: Buildings

159. This section is based on paragraphs 1(1), (2) and 5(1) of Schedule AA1 to CAA 1990. It brings together the material excluding buildings from being plant or machinery.

160. Subsection (1) sets out the general rule that buildings are not plant or machinery.

161. Subsection (2) is based on paragraph 5(2) of Schedule AA1 to CAA 1990. It provides that references to the provision of a building include the construction or acquisition of a building.

162. Subsection (3)(a), (b) and (c) treats assets incorporated in or connected with a building as part of the building and list A provides a list of assets treated as buildings, whether or not they would otherwise be so.

163. Subsection (4) provides a cross-reference to the list of expenditure unaffected by this section in section 23.

164. Chapter 14 provides rules under which allowances can be claimed for fixtures which are assets incorporated in buildings and which in law become part of the building. An asset cannot qualify under Chapter 14 as a fixture unless it is plant or machinery in the first place (see section 172). As the fixture is part of a building, section 25 means that it cannot be plant or machinery unless it comes within the exceptions in section 23.