Capital Allowances - Update and Refresher

Capital Allowances – Recent Changes 2024 

CAPITAL ALLOWANCES ON PLANT AND MACHINERY 

1. Conditions to claim PMAs 
2. Date that Expenditure is Incurred - General rule 

THE UPS AND DOWNS OF CAPITAL ALLOWANCE RATES 

1. Integral features 
2. Annual Investment Allowance (AIA) 
3. Anti-Avoidance – Connected Persons 
4. Small plant and machinery pools 
5. Computer Software is Plant 
6. Capital allowances on cars 

CAPITAL ALLOWANCES AND THE NEW BASIS PERIOD RULES  

1. The New “Tax Year” Basis from 2024/25 
2. Capital Allowances and the Transitional Year 

FIXTURES IN BUILDINGS 

1. Introduction 
2. Fixtures within leasehold buildings 
3. Section 198 CAA 2001 election 
4. Mandatory Pooling of Fixtures in Buildings 
5. Interaction with Capital Gains 

SUPER-DEDUCTION, FULL EXPENSING AND THE 50% FYA 

1. Finance Act 2021 Changes 
2. 50% FYA for “Special Rate” Pool Equipment 
3. Extension of Super-deduction to certain leased assets

STRUCTURES AND BUILDINGS ALLOWANCE 

1. Tax relief for the Cost of Constructing Commercial Buildings 
2. Renovations and subsequent capital works 
3. Periods of Disuse or change of use of a qualifying structure or building 
4. Interaction with capital gains 
5. Leased structures and buildings 

CAPITAL ALLOWANCES FOR FREEPORTS AND INVESTMENT ZONES

1. Enhanced Structures and Buildings Allowance
2. Enhanced Capital Allowances 
3. Workers employed in Freeport Areas

APPENDIX 1 : EXTRACT FROM CAPITAL ALLOWANCES ACT 2001 RELATING TO STRUCTURES IN BUILDINGS (SUBJECT TO CROWN COPYRIGHT) 

APPENDIX 2 – CAPITAL ALLOWANCES CASE STUDY