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HMRC internal manual

Capital Allowances Manual

Plant and Machinery Allowances (PMA): introduction: UK property business

CAA01/S16 & CAA01/S35

A property business is an ordinary property business or an overseas property business, (Part 2 Chapter 2 ITTOIA 2005), (CH 2 CTA 2009 s205 and s206)

Where the qualifying activity is an ordinary or overseas property business (or special leasing of plant or machinery - CA20040), expenditure incurred on the provision of plant or machinery for use in a dwelling house does not qualify for PMA.

Expenditure incurred on an asset that is provided partly for use in a dwelling house and partly for other purposes should be apportioned. The part apportioned to use for purposes other than use in a dwelling house qualifies for capital allowances.

The term ‘dwelling-house’ is not defined and therefore takes its ordinary meaning - CA11520. You should treat any building, or part of a building that affords the facilities required for day-to-day private domestic existence as a dwelling house. In most cases there should be little difficulty in deciding whether or not particular premises comprise a dwelling house, but in difficult cases the question is essentially one of fact.

A block of residential flats is not a dwelling house, although the individual flats in it will be dwelling houses.

A lift or central heating system serving the common parts of a building which contains two or more dwelling houses will not comprise part of either dwelling house. A central heating system serving an individual residential flat does not however qualify for PMA.

Expenditure on a central heating system serving the whole of the building containing two or more dwelling houses should be apportioned between the common parts should be apportioned between the common parts, which part qualifies for PMA, and the residential flats or individual dwelling houses which do not.