Plant & Machinery Allowances (PMA): Long-life assets: Exclusions
CAA01/S93 - S96
Long-life asset treatment does not apply to expenditure:
- on the provision of plant or machinery which is a fixture in, or is provided for use in, a building used wholly or mainly as, or for purposes ancillary to the purposes of, a dwelling house, retail shop, showroom, hotel or office.
incurred before 1 January 2011 on the provision of ships of a sea-going kind other than ones which:
- are of a type primarily used for sport or recreation, or
- are offshore installations for the purposes of the Mineral Workings (Offshore Installations) Act 1971, such as oil rigs or gas installations, or
would be offshore installations if the activities for which they are used or to be used were carried on in controlled waters.
- incurred before 1 January 2011 on the provision of railway assets for use wholly and exclusively in a railway business.
- on the provision of cars as defined in CAA01/S81 or CAA01/S268A CA23510.
The list of excluded buildings is the same as the list in CAA01/S277 of buildings that are not industrial buildings for IBA CA32310. The wholly or mainly condition is similar to the 25% rule in CAA01/S283 CA32700 but it is wider than it. The 25% rule treats the whole of a building as an industrial building if the cost of constructing the parts that are not used for a qualifying trade is not more than 25% of the cost of constructing the whole building. You should accept that the wholly or mainly condition is satisfied if at least 75% of the building measured on a reasonable basis, for instance by cost or floor area, is used for purposes within the list of excluded buildings.
The definition of ships that are excluded from long-life asset treatment is broadly the same as the definition of qualifying ships for rollover relief CA25350 except that there is no registration or weight requirement.
The definition of a railway includes a tramway or other system of guided transport. Railway assets are locomotives, rolling stock, tracks, stations, light maintenance depots, signalling equipment, power supplies and other associated apparatus. A railway business is a business or the part of a business that provides a public service of transporting goods or passengers by means of a railway in the UK or the Channel Tunnel. Expenditure on the provision of a railway asset for use (whether by the owner or by a lessee) wholly and exclusively for the purposes of a railway business is excluded from long-life asset treatment. Expenditure which involves a benefit to a non-railway business may satisfy the wholly and exclusively condition if the benefit is incidental (see BIM42135), for instance an electricity generator to supply power to a railway system which also incidentally supplies power to shops on railway stations. Parts of a station which are intended to be used to a material extent for other purposes are likely to fail the wholly and exclusively condition but may come within the shops and offices exclusion instead.