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HMRC internal manual

Capital Allowances Manual

PMA: Short life assets: Meaning of short life asset

CAA01/S83 & S84

An asset is a short life asset (SLA) if the person who incurs qualifying expenditure on it elects to treat it as a SLA and it is not excluded from SLA treatment. The actual or expected life of the asset is irrelevant in deciding whether or not it qualifies for SLA treatment. All that matters is that an election is made and that it is not specifically excluded.

Assets that cannot be treated as SLAs are:

  • assets that were provided for some other purpose including leasing under a long funding lease before being brought into use for a qualifying activity CA23030;
  • assets received as a gift CA23040;
  • assets used for special leasing CA20040;
  • cars apart from ‘hire cars for disabled persons’ (see definition below);
  • long life assets CA23700;
  • special rate expenditure assets CA20006 and CA22360
  • assets provided for leasing except: those used in the designated period for a qualifying purpose and for no other purpose; and ‘hire cars for disabled persons’ (see definition below);
  • assets leased overseas that qualify for WDAs at the 10% rate CA24200;
  • assets leased to two or more persons jointly where at least one lessee is a non- resident who does not use the asset exclusively for earning profits chargeable to tax and the leasing is not protected leasing CA24400;
  • ships CA25000;
  • assets used partly for a qualifying activity and partly for other purposes CA27000; and
  • assets that receive a partial depreciation subsidy CA27100.

Hire cars for disabled persons

CAA01/S268D

A car is a hire car for a disabled person if it is provided wholly or mainly for hire to, or the carriage of, any of the following persons in the course of a trade:

  • A person in receipt of a disability living allowance under the Social Security Contributions and Benefits Act 1992 or the Social Security Contributions and Benefits Act (Northern Ireland) 1992 because of entitlement to the mobility component;
  • A person in receipt of a personal independence payment under the Welfare Reform Act 2012, or the corresponding provision in Northern Ireland, because of entitlement to the mobility component;
  • A person in receipt of an armed forces independence payment under a scheme established under section 1 of the Armed Forces (Pensions and Compensation) Act 2004;
  • A person in receipt of a mobility supplement under a scheme made under the Personal Injuries (Emergency Provisions) Act 1939; or
  • A person in receipt of a mobility supplement under an Order in Council made under section 12 of the Social Security (Miscellaneous Provisions) Act 1977.