CA20050 - Plant and Machinery Allowances (PMA): introduction: management of an investment company

CAA01/S18

Management of a company with investment business is a qualifying activity for PMA. The term ‘company with investment business’ has the same meaning as in CTA09/S1218B. It is a company whose business consists wholly or partly in the making of investments, but does not include a credit union.

When you decide whether an asset is provided for the purposes of the management of an investment company you should be guided by how you treat revenue costs like repairs and running expenses. See CTM08040 and CTM08050. If the revenue costs of an asset are treated as a management expense then expenditure to buy that asset is qualifying expenditure provided that it meets the normal conditions for being plant or machinery.

Writing-down and balancing allowances for any accounting period are given by deduction from income for that period and any excess allowances become management expenses, which can be offset against total profits for the same period or carried forward as excess management expenses to future periods. Balancing charges are taxed as income of the business.