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HMRC internal manual

Business Income Manual

Specific deductions: repairs and renewals: assets on which capital allowances given

S33A Capital Allowances Act 2001

The replacement of a component part of an asset (part of an ’entirety’) is a revenue repair provided that replacement merely maintains the asset in its original form. The fact that capital allowances have been given on the asset as a whole does not prevent a revenue deduction being made for a repair to that asset.

Integral features

There are special rules for assets that are ‘integral features’. The following are integral features:

  • an electrical system (including a lighting system),
  • a cold water system,
  • a space or water heating system, a powered system of ventilation, air cooling or air purification, and any floor or ceiling comprised in such a system,
  • a lift, an escalator or a moving walkway,
  • external solar shading.

If expenditure on an integral feature represents the whole, or more than 50%, of the cost of replacing the integral feature, then the whole of the expenditure is to be treated as capital expenditure on the replacement of an integral feature for capital allowances purposes. No deduction is then available for the expenditure in computing the profits of the trade (except under the capital allowances rules). This applies both where the cost is incurred all at once and where the cost is incurred within any period of 12 months.

For further guidance on this point, see CA22310 onwards.