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HMRC internal manual

Capital Allowances Manual

From
HM Revenue & Customs
Updated
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IBA: Qualifying trade: Cold stores

Cold stores are industrial buildings. They are used for a trade of manufacturing or processing. In the case of* Ellerker v Union Cold Storage Co. Ltd. 22TC195* it was held thatcold storage premises which contained machinery for manufacturing ice were within the definition of a ‘mill’. MacNaghten J held that ‘a mill is a building where goods are subjected to treatment or processing of some sort and machinery is used for that purpose’.

Some cold stores also qualify for plant and machinery allowances and in those cases the taxpayer can choose which allowance to claim.

Cold stores that qualify for plant and machinery allowances are effectively large fridges. They are incapable of a separate existence as a building. The structure of the building will be a framework round the refrigeration unit and cannot be separated from it.

Other cold stores are more like a fridge within a building. There will be an insulated “box” within the building that provides the insulation and the building will be capable of an independent existence if the insulated “box” were to be removed. In these cases the “box” qualifies as plant or machinery but the actual building qualifies for IBA.