There was good news for landlords recently, as the government announced amendments to Finance Bill 2021 to enable background plant and machinery in leased buildings to qualify for a super-deduction or an SR allowance.
As a reminder, it was announced at Spring Budget 2021 that a new 130% "super-deduction" would be available for expenditure on new plant and machinery which would otherwise qualify for the 18% main rate of capital allowances. A special rate first year allowance at 50% (the SR allowance) was also made available for expenditure that would otherwise have qualified for the special rate writing down allowance, such as integral features or long life assets. Expenditure must be incurred between 1 April 2021 and 31 March 2023, and not as a result of a contract entered into before 3 March 2021, in order to qualify.
The original draft legislation denied landlords the benefit of the super-deduction and SR allowance in many cases since it excluded plant and machinery leased to tenants. But as a result of lobbying, the government has changed its stance on this, so that so-called background plant and machinery will qualify (albeit that the nature of the plant and machinery on which landlords generally incur expenditure means that the SR allowance, rather than the super-deduction, is more likely to be in point).
Return to Budget 2021.
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