capital allowance
A tax allowance on capital expenditure on particular items for use in a business. These include machinery and plant, industrial buildings, mines and oil wells, energy-saving equipment, and scientific equipment. For other types of capital expenditure neither the capital cost nor the depreciation is allowable against tax. A 100% annual investment allowance is given for expenditure up to a specified limit (which changes from year to year). Expenditure in excess of this sum attracts a writing-down allowance at a lower rate.

In order to claim a capital allowance, the asset for which the allowance is claimed must belong to the person in consequence of a payment (Capital Allowances Act 2002 s 167–70). The courts have interpreted the word “belong” by reference to concepts of property law. In Stokes v Costain Property Investment Ltd [1984] 1 All ER 849 the Court of Appeal held that the tenant was not able to claim capital allowances for a lift installed by the tenant as, under general landlord principles, the act of installing the lift made the lift the property of the landlord. A similar decision on fixtures was given in Melluish v BMI(3) Ltd [1995] 4 All ER 453 (CA).

• filing
• final act
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• fine
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