Chapter 13 Capital allowances – further computations

Question 1

13.1 Special rate pool

Answer 1

Expenditure allocated to the special rate pool includes:
• Integral features
• Long life assets
• Thermal insulation of buildings used in a business
• Cars with CO2 emissions of more than 110g/km
• Solar panels
Assets in the special rate pool apart from cars are eligible for AIA. Any excess expenditure is eligible for a 6% writing down allowance. If there is both a general and special rate pool AIA is allocated to the special rate pool first and then the general pool if there is any remaining.

Question 2

13.2 Integral features

Answer 2

Case law brings a distinction between equipment ‘with which’ a business is carried on and the premises or setting ‘in which’ the business is carried on. Integral features are according to the government assets such as:
• Lifts, escalators and moving walkways
• Space heating systems
• air conditioning systems and air-cooling systems
• Hot and cold-water systems (excluding toilet and kitchen facilities)
• Electric lighting and power systems
• External solar shading

Question 3

13.3 Long life assets

Answer 3

They have a predicted useful life of at least 25 years, they are placed in the special rate pool. Items are not treated as long life assets where total expenditure in the accounting period on such assets does not exceed £100,000. This limit is adjusted for short or long accounting periods. If an asset has been treated as a long-life asset by a seller, the buyer will also have to treat the asset as a long-life asset regardless.

Question 4

13.4 Small plant and machinery pools

Answer 4

Businesses can claim a WDA of up to £1,000 when the TWDV in either pool is £1,000 or less. Businesses do not have to take the maximum allowance; they can claim less. The small pool limit of £1,000 is scaled up or down for short or long accounting periods. It does not apply to ‘single asset’ pools.