Business Revival Property Aspects Banner

Integral Feature Allowances – Use them before you lose them!

You may still be able to take advantage of little known legislation to claim a tax allowance on the integral features within your property.

This could be worth thousands of pounds to you.

But you need to investigate this now as the legislation may be about to change and the tax paid would be lost forever.

The rules on Capital Allowance – integral features were introduced in April 2008. They are classed within the Capital Allowances Act 2001 (CAA01) as Plant & Machinery (P&M) and as such, attract capital allowances.

Ross Wyllie, Managing Director of Conation Capital said; “Claiming Capital Allowances can be overwhelming for any business, it is a complex legislation. Knowing what the integral features of your business will go some way in helping you understand your claim”.

The introduction of integral features was part of a wider package of Business Tax reforms, introduced by Finance Act 2008. It included changes intended to simplify and reduce the distortive impact of capital allowances.
In order to write down the cost of features that are normally integral to a modern building (such as electrical, cold and hot water systems etc), which have a longer average economic life than other plant & machinery, at a more appropriate rate, a new pool was introduced for these integral features which would attract writing down allowances at a ‘special rate’ of 10% per annum.

The assets which are now classed as integral features are:

* Electrical systems (including lighting systems)

* Cold water systems

* Space or water heating systems, powered systems of ventilation, air cooling or air purification, and any floor or ceiling comprised in such systems

* Lifts, escalators and moving walkways

* External solar shading

The rules also specifically clarify that the new definition does not extend to any asset whose principal purpose is to insulate or enclose the interior of a building, or to provide interior walls, floors or ceilings which are intended to remain permanently in place (S23(4) & S33A(6)).
So if, for example, a business installs a new, permanent false ceiling in its premises, in order to conceal new wiring and service pipes, expenditure on that ceiling would not qualify for P&M allowances.

On the other hand, if a business installs in its premises a plenum floor or plenum ceiling, the principal purpose of which is to function as an integral part of the heating or air conditioning system (for example, the plenum floor or plenum ceiling may form the fourth side of a duct or channel through which stale air is extracted and treated air is discharged), that expenditure would qualify for PMAs as part of an ‘integral feature’ of the building or structure (CA22070 & CA22080).

Ross Wyllie continued: “When undertaking a claim for capital allowances it is therefore important to determine when expenditure was incurred in order to determine whether they qualify as being “integral features” and should therefore be allocated to the “special rate pool”. Or alternatively, whether the expenditure was incurred before April 2008 and may therefore qualify for the “main pool” where the WDAs were 20% p.a. (reduced to 18% as from April 2012)

The capital allowances legislation was changed in an effort to help define more closely those features which do qualify for allowances CAA01 does not contain a definitive list of items which qualify as P&M”.

If you need further confirmation as to whether you qualify for any property-related tax rebate, please contact the experts at Conation Capital on 03000 309900 or