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Thus guidance covers transactions where the relevant day is before 13 November 2008. See BLM80158 where the relevant day is on or after 13 November 2008 and before 23 March 2011 and BLM80155 where the relevant day is on or after 23 March 2011.

Trainco Ltd has the following assets on its balance sheet:

Fixed Assets	£
Freehold property	1,000,000
Net investment in train leases	5,000,000
Office furniture	15,000
Computer equipment	100,000
Vehicles	80,000
Artworks	500,000
Total	6,695,000

Calculate the accounting value of plant or machinery

»Ê¹ÚÌåÓýapp freehold property is used as office premises by the company. »Ê¹ÚÌåÓýapp value will need to be apportioned to determine what element is attributable to plant or machinery. »Ê¹ÚÌåÓýapp building contains lifts and air conditioning systems; these items are plant or machinery. »Ê¹ÚÌåÓýapp value of this equipment is agreed to be £300,000.

Trains are plant or machinery; they qualify for plant or machinery allowances. »Ê¹ÚÌåÓýapp train leases are accounted for as finance leases and the value of the lease rather than the train itself is shown on the balance sheet. »Ê¹ÚÌåÓýapp net investment in the lease figure is included in the calculation of the net book value of plant or machinery. »Ê¹ÚÌåÓýapp total attributable to net investment in leases is £5,000,000.

»Ê¹ÚÌåÓýapp office furniture used in the building qualifies for plant or machinery allowances and this value is included.

»Ê¹ÚÌåÓýapp computer equipment qualifies for plant or machinery allowances and this value is included.

»Ê¹ÚÌåÓýapp vehicles qualify for plant or machinery allowances and this value is included.

»Ê¹ÚÌåÓýapp artworks do not qualify for plant or machinery allowance (unless it is part of the business to provide ambience - here it is not). This value is not included.

»Ê¹ÚÌåÓýapp total net book value attributable to plant or machinery is therefore £5,495,000.

Identifying the qualifying leased plant or machinery

You now need to determine how much of this plant or machinery is qualifying leased plant or machinery.

All assets except for the artworks and the land value qualify for plant or machinery allowances.

»Ê¹ÚÌåÓýapp fixtures in the building are not subject to a plant or machinery lease.

»Ê¹ÚÌåÓýapp trains are subject to a lease.

»Ê¹ÚÌåÓýapp office furniture is not subject to a plant or machinery lease.

»Ê¹ÚÌåÓýapp computer equipment includes a number of items which are leased along with the trains. »Ê¹ÚÌåÓýapp value of the leased assets is £60,000.

»Ê¹ÚÌåÓýapp vehicles are not subject to a plant or machinery lease. »Ê¹ÚÌåÓýappy are used by the employees of the company.

Total value of assets subject to plant or machinery leases: £5,060,000

More than 50% of the assets are subject to a qualifying lease and so the company is carrying on a business of leasing plant or machinery.