CA23060 - Plant and Machinery Allowances (PMA): qualifying expenditure: plant and machinery in dwelling-house

CAA01/S35

Expenditure incurred on the provision of plant or machinery ‘for use in’ a dwelling-house is not qualifying expenditure for a UK property business, an overseas property business or the special leasing of plant or machinery.

Expenditure incurred on an asset that is provided partly for use in a dwelling-house and partly for other purposes should be apportioned. The part apportioned to use for purposes other than use in a dwelling-house qualifies for capital allowances.

The plant or machinery does not necessarily have to be located in a dwelling-house in order to be ‘for use in’ it. For example, if a landlord installs ground-mounted solar panels in the garden of a house he lets and the electricity generated will be used in that house, the expenditure will not qualify for PMAs.

There is no definition of “dwelling-house” for the purpose of CAA01/S35, so it takes its ordinary meaning. For a detailed discussion on the meaning of “dwelling-house” see CA11520.

You should treat any building, or part of a building that affords the facilities required for day-to-day private domestic existence as a dwelling-house. In most cases, there should be little difficulty in deciding whether or not particular premises comprise a dwelling-house, but in difficult cases the question is essentially one of fact.

In a house in multiple occupation, shared areas such as hallways, stairs, landings, the attic and the basement are all part of the dwelling-house, therefore PMAs are not available for use in these areas (see CA11520).

A block of residential flats is not a dwelling-house, although the individual flats in it will be dwelling-houses.

A lift or central heating system serving the common parts of a building which contains two or more dwelling-houses will not comprise part of any dwelling-house. A central heating system serving an individual residential flat does not however qualify for PMAs.

Expenditure on a central heating system serving the whole of the building containing two or more dwelling-houses should be apportioned between the common parts, in relation to which PMAs are available; and the residential flats or individual dwelling-houses, in relation to which PMAs are not available.

Example

Bob is a landlord. He owns a block of residential flats and a nursing home. He buys:

  • new cookers for the flats;
  • a new communal fire alarm system for the block of flats; and
  • new beds for the nursing home.

His expenditure on the cookers is not qualifying expenditure and so does not qualify for PMAs because it is expenditure on assets for use in dwelling-houses. The prohibition does not apply to the fire alarm system for the block of flats, since this serves the common shared areas of the building, or the beds for the nursing home because they are not for use in a dwelling-house.