Commentary

B3.356 Plant and machinery allowances on fixtures—persons who are treated as owners of fixtures

Business tax
Business tax | Commentary

B3.356 Plant and machinery allowances on fixtures—persons who are treated as owners of fixtures

Business tax | Commentary

B3.356 Plant and machinery allowances on fixtures—persons who are treated as owners of fixtures

In order to ensure, as far as possible, that a person who incurs capital expenditure on the provision of fixtures is able to obtain capital allowances, the legislation provides rules to determine the person to whom the fixture is deemed to be owned (to belong). There are separate rules for each of the following situations:

  1.  

    •     the person incurring the expenditure has an interest in the relevant land1

  2.  

    •     the person incurring the expenditure lets the fixtures under an equipment lease (see below) to a person having an interest in the relevant land

  3.  

    •     a person purchases an existing interest in the relevant land

  4.  

    •     the person entitled to the allowances grants a lease of the relevant land, and

  5.  

    •     expenditure on designated energy-saving equipment which a business is contracted to provide and operate under an energy services agreement

Expenditure incurred by a person with an interest in land

The general rule is that plant or machinery is treated as being owned by a person who incurs expenditure on its provision for the purposes of his qualifying activity if the asset becomes a fixture at a time when he has an interest in the relevant land2. Where there are two or more such persons with different interests in the land, the person having the most subordinate interest is the one entitled to the allowances. Thus, the only interest to be taken into account is3:

  1.  

    (a)     an easement

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