No Capital Allowances for Equipment in a “Dwelling House”

As a general rule, there are no capital allowances available for expenditure on plant and machinery in a dwelling house.

In a recent Tax Tribunal case it was decided that only expenditure incurred on equipment installed in the “common parts” of a dwelling house qualifies for tax relief. This would typically comprise a common entrance lobby, corridors, stairs or lifts and those parts of the building which do not provide any living facilities.

A major exception to this rule is where the property qualifies as furnished holiday lettings where the business is treated as if it is a trade. Consequently, assets such as beds, sofas, televisions and white goods will qualify for capital allowances as plant and machinery in such a business.

Note also that the new Structures and Buildings Allowance is not available in respect of “dwellings” nor structures in the garden such as a garden office.

New Capital Allowance for Commercial Buildings