Capital Allowances for Integral Fixtures
For expenditure incurred on or after 1 April 2008 for limited companies and 6 April 2008 unincorporated businesses a new reduced rate of writing down allowance was introduced for integral features. Expenditure incurred on integral features is allocated to a special rate pool. The current rate of writing down allowances since April 2012 is 8%.
Integral features are:
a. Electrical systems (including lighting systems)
b. Cold water systems
c. Space or water heating systems, powered systems or ventilation, air cooling or air purification (including floors or ceilings comprised in such systems)
d. Lifts, escalators and moving walkways
e. External solar shading
HMRC has provided guidance on their interpretation of these terms. For example, an electrical system is a system for taking electrical power (including lighting) from the point of entry to the building or structure, or generation within the building or structure, and distributing it through the building or structure, as required. It does not include other building systems intended for other purposes, which may include wiring and other electrical components. For example, communication, telecommunication and surveillance systems, fire alarm systems or burglar alarm systems.
The rules apply where expenditure is on the provision or replacement of an integral feature. However, if expenditure on an integral feature (including repairs) is more than 50% of the cost of replacing that entire integral feature, then the expenditure must be treated as a capital replacement.