The Capital Allowances Act 2001 (c. 2) is an act of the Parliament of the United Kingdom that governs how capital allowances are deducted from income taxable under the Income Tax Act 2007 and the Corporation Tax Act 2009.
Types of allowances
Capital allowances fall under several categories:
initial allowance (IA); annual investment allowance (AIA) first-year allowance (FYA); writing down allowance (WDA); balancing allowance.
Under the act, they are available for specified types of claims:CAA 2001, s. 1
+ CAA 2001: available allowances Part Allowance IA AIA FYA WDA2plant and machineryon or after 1 April 2008 (for CT purposes) or 6 April 2008 (for IT purposes) that is not otherwise excluded: restricted to specified qualifying activities: 3industrial buildingsavailable in specified enterprise zones: withdrawn for financial years beginning on or after 1 April 2011: 4agricultural buildingswithdrawn for financial years beginning on or after 1 April 2011: 4Aflat conversionrepealed by Finance Act 2012, with effect from April 20135mineral extraction6research and development100% of qualifying expenditure or amount claimed, whichever is less: 7know-how8patents9dredging10assured tenancieswhere qualifying expenditure was incurred before 1 April 1992: available only to approved bodies owning specified buildings:
Provisions The act contains the UK's capital allowances code. The act allows for capital allowances on certain assets including cars, long-life assets, and plant or machinery for leasing which did not qualify.
For example, Motability cars fall within the short-life asset regime under the act.
Repealed enactments Section 580 of the act repealed 32 enactments, listed in schedule 4 to the act. CitationShort titleExtent of repeal1970 c. 9Taxes Management Act 1970In section 98 in column 1 of the Table the words "Sections 23(4) and 49(4) of the Capital Allowances Act 1990".1982 c. 39Finance Act 1982Section 137(2), (3), (6) and (7).1984 c. 32London Regional Transport Act 1984In Schedule 5, paragraph 5(b) and the word "and" before it.1988 c. 1Income and Corporation Taxes Act 1988In sections 65A(7) and 70A(6) the words "and section 29 of the 1990 Act (provisions relating to furnished holiday accommodation)".In section 83A, in subsection (2), paragraph (b) and the word "or" before it and in subsection (3), paragraph (b) and the word "and" before it.In section 84, in subsection (1), paragraph (b) and the word "or" before it and in subsection (3), paragraph (b) and the word "and" before it.In section 117, in subsection (1), the words "or allowed" (in each place), "or section 141 of the 1990 Act", paragraph (b) and the word "or" before it, and, in subsection (2), in the definition of "the aggregate amount", the words "or allowed", "or section 141 of the 1990 Act", paragraph (b) and the word "or" before it.In section 118, in subsection (1) the words "or allowed" (in each place), "or section 145 of the 1990 Act", paragraph (b) and the word "or" before it, and, in subsection (2), in the definition of "the aggregate amount", the words "or allowed", "or section 145 of the 1990 Act", and paragraph (b) and the word "or" before it.In section 198(2), the words "and Part II of the 1990 Act (capital allowances in respect of machinery and plant)".In section 384(10), the words following paragraph (b).Section 393A(5) and (6).In section 397, in subsection (5), the definition of "basis year" and, in the definition of "chargeable period", the words from "or any basis period" to the end of the definition; and subsection (6).In section 411(10) the words "Without prejudice to the provisions of section 161(5) of the 1990 Act".Sections 434D and 434E.Sections 520 to 523.Section 528(1) and (4).Section 530.In section 531, in subsection (3), the words following paragraph (b) and in subsection (7) the words "and section 530(1) and (6)".In section 533(1), in paragraph (b) of the definition of "income from patents", the words "520(6), 523(3)," and the definition of "the commencement of the patent".In section 577, in subsection (1), paragraph (c) and the word "and" before it, in subsection (7)(a) the words ", or to the use of an asset for," (in both places) and in subsection (10) the words ", or any claim for capital allowances in respect of the use of an asset for,".In section 834(2), the words "and also for sections 144 and 145 of the 1990 Act".In Schedule 19AC, paragraph 9C.1989 c. 26Finance Act 1989Section 121.In Schedule 13, paragraph 27.1990 c. 1Capital Allowances Act 1990The whole act.1990 c. 29Finance Act 1990Sections 60, 87 and 103.In Schedule 7, paragraph 9.In Schedule 9, paragraph 5.In Schedule 13, paragraphs 1 to 6.Schedule 17.1991 c. 31Finance Act 1991Sections 59 to 61.Schedule 14.In Schedule 15, paragraph 28.1991 c. 21Disability Living Allowance and Disability Working Allowance Act 1991In Schedule 2, paragraphs 20 and 21.1991 c. 60Water (Consolidation) (Consequential Provisions) Act 1991In Schedule 1, paragraph 53.1992 c. 4Social Security Contributions and Benefits Act 1992In Schedule 2, paragraph 1(b) and, in paragraph 2, the words from "subject to deduction" to the end.1992 c. 6Social Security (Consequential Provisions) Act 1992In Schedule 2, paragraph 109.1992 c. 7Social Security Contributions and Benefits (Northern Ireland) Act 1992In Schedule 2, paragraph 1(b) and, in paragraph 2, the words from "subject to deduction" to the end.1992 c. 9Social Security (Consequential Provisions) (Northern Ireland) Act 1992In Schedule 2, paragraph 38.1992 c. 12Taxation of Chargeable Gains Act 1992In section 195, in subsection (3), the words from "and "basis year"" to the end, subsection (5) and in subsection (6), paragraph (b) and the word "and" before it.In section 288(1), the definition of "the 1990 Act".In Schedule 10, paragraph 21.1992 c. 48Finance (No. 2) Act 1992In section 43(1), the definition of "the 1990 Act".Sections 67 to 71.Schedule 13.In Schedule 17, in paragraph 5(5), paragraph (c) and the word "and" before it.1993 c. 34Finance Act 1993Sections 113 to 117.Schedules 12 and 13.1994 c. 9Finance Act 1994Sections 117, 118(6)(a), 119(1), 120 and 121.Sections 211(1) and 212 to 213.Section 214(4) to (6).In Schedule 24, in paragraph 1(1), the definition of "the Allowances Act".In Schedule 25, in paragraph 5(3), the definition of "the 1990 Act".1994 c. 23Value Added Tax Act 1994In Schedule 14, paragraph 11.1995 c. 4Finance Act 1995Sections 94 to 101.In Schedule 8, paragraphs 23(1) and 24.In Schedule 9, paragraph 3.1996 c. 8Finance Act 1996Sections 135(3) to (5), 179 and 180.In Schedule 20, paragraph 44.In Schedule 21, paragraphs 26 to 34.Schedule 35.In Schedule 39, paragraph 1(1), (3) and (4).1996 c. 55Broadcasting Act 1996In Schedule 7, in paragraph 1(1), the definition of "the Allowances Act" and in paragraph 13(1), in the heading the words "and structures".1997 c. 11Planning (Consequential Provisions) (Scotland) Act 1997In Schedule 2, paragraph 45.1997 c. 16Finance Act 1997Sections 66(2) and (5), 84 and 86.In Schedule 12, in paragraph 11, in sub-paragraph (8) the words "or its basis period" and sub-paragraph (15).Schedule 14.In Schedule 15, paragraphs 3, 4, 5(3), 7, 8 and (9)(2).Schedule 16.1997 c. 58Finance (No. 2) Act 1997Sections 42 to 47.1998 c. 14Social Security Act 1998Section 59(2).1998 c. 17Petroleum Act 1998In Schedule 4, paragraph 27.1998 c. 36Finance Act 1998Sections 83 to 85.In Schedule 5, paragraphs 40 and 47 to 61.In Schedule 7, in paragraph 1 the word "528(1)(a)" and paragraph 4.1999 c. 16Finance Act 1999Sections 50(2), 77 and 78.In Schedule 5, paragraph 2(3).In Schedule 11, paragraphs 4 to 8.1999 c. 29Greater London Authority Act 1999In Schedule 33, paragraph 12(1)(a).2000 c. 17Finance Act 2000Sections 70 to 72.Section 75(1) to (3), (5) and (6)(b) and (c).Section 76(1).Section 77.Section 79.Sections 80 and 81.Section 113.In Schedule 19, paragraphs 7 to 11.In Schedule 22, in paragraph 84(1) the words "or structure".2000 c. 38Transport Act 2000In Schedule 26, in paragraph 1(1), the definition of "the 1990 Act".
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