The following Owner-Managed Businesses guidance note Produced by Tolley in association with Martin Wilson and Steven Bone provides comprehensive and up to date tax information covering:
A fixture is defined for capital allowance purposes as plant or machinery that is installed or fixed in or to a building or land so as to become, in law, part of that building or land and also specifically includes any boiler or water-filled radiator installed in a building as part of a space or water heating system. Examples of fixtures include:
lifts and escalators
heating, lighting and electrical systems
sanitary appliances, and hot and cold water systems
telephone and data installations
CAA 2001, s 173
However, the definition of fixtures is much wider than the list shown above and can include, for example, individually small items such as signs and door furniture. Consequently, it is practically inconceivable that a building will not contain assets on which capital allowances could potentially be claimed.
Indeed, it is often easier to define what is not a plant and machinery fixture. In the context of a property transaction, any expenditure on the building itself (that is to say, the ‘bricks and mortar’) and expenditure relating to the land on which the property stands, is excluded from being regarded as in respect of fixtures, and will not qualify for plant allowances.
Such expenditure may qualify for structures and buildings allowances, at much lower rate, see the Structures and buildings allowance guidance note.
In order to claim capital allowances on a fixture the business must own the fixture because they have incurred expenditure on it and also must have an interest in the land or building that the fixture is part of. An interest in land can be a freehold, a lease or just a licence to occupy perhaps because of a rental agreement.
Consequently, it is most unusual that a potential claim will fail because the person incurring expenditure does not have an interest in the building. However, problems can arise in the context of a group of companies. Imagine a situation where a subsidiary company (‘ABC’) occupies a property
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