CA22330 - Plant and Machinery Allowances (PMA): buildings and structures: expenditure on integral features: the assets - more detail
CAA01/S33A, S33B
An electrical system (including a lighting system) is not defined for the purposes of the legislation, so the term takes its ordinary meaning: a system for taking electrical power (including lighting) from the point of entry to the building or structure, or generation within the building or structure, and distributing it through the building or structure, as required. The system may range from the very simplest to the most complex.
The term does not include other building systems intended for other purposes, which may include wiring and other electrical components. For example, communication, telecommunication and surveillance systems, fire alarm systems or burglar alarm systems. These other systems are all separately identified in S23 (3) List C of CAA01.
The cost of a ducting system within the building or structure follows the tax treatment of the system or systems that the ducting supports. So ducting which relates solely to the building’s electrical system would be part of that system and would qualify for WDAs at the rate for the special rate pool, whereas ducting relating solely to a computer system could qualify for WDAs at the rate for the main pool. Where ducting supports two or more systems simultaneously, the relevant expenditure should be apportioned on a fair and reasonable basis, and capital allowances may be claimed on each portion of the total expenditure at the rate appropriate to that portion.
A cold water system is, similarly, not specifically defined, so the term takes its ordinary meaning: a system for taking water from the point of entry to the building or structure and distributing it through the building or structure, as required. Again the systems may range from the very simplest to the most complex.
The water industry and electricity undertakings
The inclusion of cold water and electrical systems in the classification of integral features of a building or structure does not mean, for example, that the water processing and supply systems of the water industry, or the electricity generating and supply systems of an electricity undertaking, count as the cold water or electrical system respectively, ‘of a building or structure’. In the case of both supply industries, their assets consist of a wide range of things (including structures that may qualify for industrial buildings allowances, plant and machinery assets and assets that may not qualify for any capital allowances). In other words, the assets do not comprise a single system falling within List C of section 23. So the removal of cold water and electrical systems from list C to the ‘integral features’ list has no particular or unique bearing on these businesses’ tax treatment, compared with other businesses.
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
Once again, these systems are not specifically defined, so the words used take their ordinary meaning.
A lift, an escalator or a moving walkway
Once again these words take their ordinary meaning.
External solar shading
In the run up to the 2007-08 public consultation on the ‘integral features’ reforms, key stakeholders suggested that two environmentally beneficial features of buildings, namely external solar shading and active façades, should be included within the new integral features classification. CAA01/S33A includes expenditure on the first but does not specifically refer to the latter.
Nevertheless, active façades are eligible in part: The inner skin is eligible by virtue of being considered part of the air cooling or heating systems of the building (both integral features); in effect, it forms a duct within which the cooling/heating air circulates. The external skin is not eligible as it is basically a window and so excluded by CAA01/S33A(6).