CA21010 - Plant and Machinery Allowances (PMA): meaning of plant and machinery: general approach to claims

The capital allowance legislation does not define 바카라 사이트˜plant바카라 사이트™ or 바카라 사이트˜machinery바카라 사이트™.

The starting point is that these terms take their common law meaning (sometimes referred to as the 바카라 사이트˜case law meaning바카라 사이트™). However, some assets are excluded from PMAs, regardless of whether they function as plant in common law; and some assets are treated as if they were plant, regardless of their function.

Exclusions in CAA01/S21 & 22

Legislation that says that most buildings, parts of buildings, structures and land alterations are not plant or machinery was introduced in 1994. It is now in CAA01/S21 & 22.

Exceptions in CAA01/S23

The exclusions in SS21 & 22 do not apply to the types of expenditure specifically listed in S23(2). The rules provide that expenditure on the items specified in S23(2) are to be treated as if they were plant or machinery for capital allowance purposes. The items listed are:

  • Thermal Insulation added to qualifying buildings CA22220;
  • Expenditure on personal safety due to a special threat CA22270;
  • Expenditure on the provision or replacement of integral features CA22300; and
  • Computer software CA22280.
  • Films for which an election is made under section 143 of ITTOIA05 or section 40D of F(No2) Act 92 (repealed by FA06/S178 and para 3(4) of Schedule 26 with effect from 1 January 2007.

In addition, S23(3) provides that the exclusions in SS21 & 22 do not apply to items described in 바카라 사이트˜List C바카라 사이트™ of s23, subject to the exceptions in S23(4). See CA22030. Items described in 바카라 사이트˜List C바카라 사이트™ are not automatically treated as if they were plant. Before you accept that PMAs are due for a List C asset (such as a swimming pool) you will need to be satisfied on the facts of the case that the asset functions as 바카라 사이트˜plant바카라 사이트™ in common law.

Assets treated as if they were plant

Expenditure on thermal insulation added to qualifying buildings CA22220, personal safety due to a special threat CA22270, 바카라 사이트˜Integral features바카라 사이트™ CA22300 or computer software CA22280 is always treated as expenditure on 바카라 사이트˜plant바카라 사이트™.

Common law meaning of 바카라 사이트˜plant바카라 사이트™ and 바카라 사이트˜machinery바카라 사이트™

The meaning of the word 바카라 사이트˜machinery바카라 사이트™ should not cause you any problems. Machinery includes machines and the working parts of machines. A machine usually has moving parts. Assets like motor vehicles and lathes are machines. Computers and similar electronic devices are also machinery. You may find machinery in places where you might not expect it. For example, door handles with moving parts are machinery CA21200.

The meaning of 바카라 사이트˜plant바카라 사이트™ can be more difficult.

You should apply the tax case tests to determine whether the item functions as 바카라 사이트˜plant바카라 사이트™ in common law. Essentially, 바카라 사이트˜plant바카라 사이트™, according to case law has the following features:

  • It is 바카라 사이트˜apparatus바카라 사이트™ used for carrying on the business (sometimes referred to as a 바카라 사이트˜tool of the trade바카라 사이트™);
  • It is not stock in trade; and
  • It is kept for permanent employment in the business.

Usually, business premises or setting are not 바카라 사이트˜plant바카라 사이트™. It is necessary to distinguish between the place 바카라 사이트˜in which바카라 사이트™ or 바카라 사이트˜on which바카라 사이트™ the business is carried on (premises or setting and not plant) and the apparatus 바카라 사이트˜with which바카라 사이트™ the business is carried on (might be plant).