Plant and machinery allowances—integral features
Produced in partnership with Martin Wilson
Plant and machinery allowances—integral features

The following Tax practice note Produced in partnership with Martin Wilson provides comprehensive and up to date legal information covering:

  • Plant and machinery allowances—integral features
  • Historic expenditure on integral features
  • What are integral features?
  • Certainty of treatment
  • Repairs
  • Example
  • HMRC guidance on replacements and repairs—a pragmatic approach
  • Anti-avoidance
  • Impact of integral features rules on property sales
  • Section 198 and 199 elections

Certain items of plant and machinery (see Practice Note: Plant and machinery allowances—definition of plant and machinery) are classified as ‘integral features’ by statute. If an item falls within one of the categories of integral features, it:

  1. does not have to satisfy the usual case law tests for deciding whether an asset constitutes plant and machinery for tax purposes (see Practice Note: Plant and machinery allowances—definition of plant and machinery), and

  2. qualifies for a ‘special’ reduced rate of writing-down allowance of 6% per annum rather than the general plant and machinery rate, which is 18% per annum

This is achieved by allocating expenditure on such items to a ‘special rate pool’ in tax computations. Pooling is explained in Practice Notes: How plant and machinery allowances are claimed—income tax and How plant and machinery allowances are claimed—corporation tax.

Expenditure on integral features may qualify for relief at 100%, instead of at the special rate, if it can be included within the annual investment allowance. For more details, see Practice Note: Plant and machinery allowances—types and rates—Annual investment allowance.

Historic expenditure on integral features

An asset is only classified as an integral feature if new expenditure has been incurred on it on or after 1 April 2008 for corporates or 6 April 2008 for non-corporates.

As a result any expenditure incurred before the rule change, which would be classified as expenditure

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