Capital allowances are tax relief on capital expenditure on qualifying machinery or plant and on certain types of buildings or structures that can be set off against taxable profits. Expenditure can be incurred either by way of the acquisition, construction or refurbishment of an investment property.

All commercial property, of whatever age or specification or whether freehold, feuhold or leasehold, may have an element of capital allowances. However, the amount or value of those allowances will vary depending on the type and specification, the acquisition price, the tax history of the property and the interest held in the property.

Some examples of qualifying machinery or plant expenditure include the following:

• Heating and air conditioning installations
• Fire fighting equipment
• Sanitary fittings
• Carpets
• Lifts and escalators