CTM08450 - Corporation Tax: management expenses: capital allowances on machinery and plant

CAA01/S18 and CAA01/S253 apply capital allowances provisions on:

  • first year allowances,
  • writing-down allowances,
  • balancing allowances,
  • balancing charges,

to machinery and plant used for the purpose of management of the business of a ‘company with investment business�.

Where capital allowances are not allowed as a deduction in computing income (for example in the computation of Schedule A or Case I income), the capital allowances should be added to the management expenses for the period.

CAA01/S254 to S256 apply to Life Assurance Companies. Separate instructions on the capital allowances available to Life Assurance companies are given in the Life Assurance Manual.

»Ê¹ÚÌåÓýapp amount of any balancing charge is treated as income of the business.

For periods beginning before 1 January 1995, companies needed to make an election to claim the allowances (CA20050). »Ê¹ÚÌåÓýappre is guidance at CA23500 onwards on capital allowances relating to motor cars.