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HMRC internal manual

Capital Allowances Manual

Plant and Machinery Allowances (PMA): qualifying expenditure: plant and machinery in dwelling house


Expenditure incurred on the provision of plant or machinery for use in a dwelling house is not qualifying expenditure for an ordinary property business, an overseas property business or the special leasing of plant or machinery.

There is no definition of ‘dwelling house’ for the purpose of CAA01/S35 so it takes its ordinary meaning. A dwelling house is a building, or a part of a building. Its distinctive characteristic is its ability to afford to those who use it the facilities required for day-to-day private domestic existence. 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 person’s second or holiday home or accommodation used for holiday letting is a dwelling house. The common parts of a building which contains two or more dwelling houses will not comprise a dwelling house, although the individual dwelling houses within the building will do so. A hospital, a prison, nursing home or hotel (run as a trade and offering services) are not dwelling houses.

A university hall of residence may be one of the most difficult types of premises to decide because there are so many variations in student accommodation. On the one hand, an educational establishment that provides on-site accommodation purely for its own students, where, for example, the kitchen and dining facilities are physically separate from the study-bedrooms and may not always be accessible to the students, is probably an institution, rather than a ‘dwelling-house’. But on the other hand, cluster flats or houses in multiple occupation, that provide the facilities necessary for day-to-day private domestic existence (such as bedrooms with en-suite facilities and a shared or communal kitchen/diner and sitting room) are dwelling-houses. Such a flat or house would be a dwelling-house if occupied by a family, a group of friends or key workers, so the fact that it may be occupied by students is, in a sense, immaterial.

The common parts (for example, the stairs and lifts) of a building which contains two or more dwelling houses will not, however, comprise a dwelling-house.

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Bob is a landlord. He owns a block of residential flats and a nursing home. He buys:

  • new cookers for the flats;
  • a new fire alarm system for the block of flats; and
  • new beds for the nursing home.


His expenditure on the cookers is not qualifying expenditure and so does not qualify for PMAs because it is expenditure on assets for use in dwelling houses. The prohibition does not apply to the fire alarm system for the block of flats or the beds for the nursing home because they are not for use in a dwelling house.

We’re aware that some advisers have submitted claims for plant and machinery allowances in respect of the shared areas (sitting rooms, kitchens etc.) of houses in multiple occupation. They contend that the shared areas are not part of the “dwelling house” and that allowances are therefore available. We strongly disagree with this position. If you come across such a claim please notify the ISBC Capital Allowances Specialists.