Capital allowance elections

HMRC states that, following the introduction of the classification of integral features in respect of relevant plant and machinery expenditure incurred on or after 1 April 2008, it is now necessary to distinguish between (i) fixtures that are integral features (thereby qualifying for allowances at the 10% rate), and (ii) other fixtures that qualify for the 20% rate in the main plant and machinery pool. HMRC say that, following Finance Act 2008 changes, it is now less likely that an election covering all the fixtures in a particular property without requiring an apportionment of value between groups (i) and (ii) above will be acceptable. See HMRC Guidance - CA26850 - PMA: Fixtures: Election procedure.

Accordingly, changes have been made to Property PSL agreements containing section 198 elections so that amounts apportioned to integral features, and to other plant and machinery, can be dealt with separately.