B3.344 Plant and machinery allowances—long-life assets
Expenditure on long-life assets qualifies as special rate expenditure (see B3.332).
'Long-life asset expenditure' means qualifying expenditure incurred on the provision of a long-life asset for the purposes of a qualifying activity and not excluded from being long-life asset expenditure1.
The general definition of a 'long-life asset' is one which, when new, has an expected useful economic life of at least 25 years. New means unused and not second-hand2. The expected useful life is calculated from the time when the asset is first used for any purpose to the time when it is no longer used or likely to be used by anyone for any purpose as a fixed asset of a business3. First use does not include construction of the asset or holding it as trading stock4.
The life of an asset is considered in relation to the asset as a whole and it will not cease to be a long-life asset merely because parts of it may need to be replaced within 25 years5. There may be cases where only part of the expenditure is within the long-life asset rules (and is therefore special rate expenditure), in which case a just and reasonable apportionment of the expenditure is made6.
Expenditure excluded from being long-life asset