Capital Allowances - Integral Features

It is correct to say that industrial building allowances are being phased out and will be completely withdrawn from April 2011. However expenditure on the provision or replacement of integral features can qualify for capital allowances. The following are assets which are classed as integral features, an electrical system, a cold water system, a space or water heating system, a powered system of ventilation, air cooling or air purification including floors or ceilings in such a system, a lift, an escalator or moving walkway, external solar shading.
Integral features qualify for an annual writing down allowances of 10%. This rate is thought more appropriate as the integral features usually have a longer useful economic life than other plant and machinery. Despite the lower writing down allowance the expenditure can be claimed under the annual investment allowance so the expenditure could be claimed in full, up to the annual investment threshold of £100,000. This may be more advantageous whereby other assets may qualify for the main writing down allowance of 20%.
 

Date published 5 Dec 2012

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.