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HMRC internal manual

Capital Gains Manual

Cash basis for small businesses - capital gains aspects: assets to which these rules apply

This guidance applies to trades where a cash basis election under ITTOIA05/S25A is, or has been, in place. The main guidance on these trades can be found at BIM70000+.

These rules apply to plant & machinery, other than cars, on which capital allowances would be due if the cash basis election were not in force.

Capital allowances are not available for assets used in a cash basis trade (with the exception of cars (ITTOIA05/S33A, BIM70035)). As cars are not chargeable assets for capital gains tax purposes (TCGA92/S263, CG76906) they are outside the scope of the rules described here.