CA20020 - PMAs: Introduction: Property business

CAA01/S16 & CAA01/S35

A property business is a UK property business or a Schedule A business.

Where the qualifying activity is a property business expenditure incurred on the provision of plant or machinery for use in a dwelling house does not qualify for PMA.

Expenditure incurred on an asset that is provided partly for use in a dwelling house and partly for other purposes should be apportioned. The part apportioned to use for purposes other than use in a dwelling house qualifies for capital allowances.

The term ‘dwelling-house’ is not defined and therefore takes its ordinary meaning. You should treat any building, or part of a building, which is a person's home as a dwelling house.

A block of residential flats is not a dwelling house, although the individual flats in it will be dwelling houses.

A lift or central heating system serving the communal parts of a block of residential flats qualifies for PMA as it is not part of a dwelling house. A central heating system serving an individual residential flat does not however qualify for PMA.

Expenditure on a central heating system serving the whole of the block should be apportioned between the communal areas, which part qualifies for PMA, and the residential flats, which part does not. This is subject to a de-minimis rule. If the part that would not qualify is 25% or less of the total expenditure, give PMAs on the whole of the expenditure.