CA22050 - Plant and Machinery Allowances (PMA): buildings and structures: cases where structure was found to be 'plant' in common law

There have been a few cases in which a structure was found to be plant in common law:

• In CIR v Barclay Curle and Co Ltd 45TC221 a dry dock was found to be plant.
• In Cooke v Beach Station Caravans Ltd 49TC514 a swimming pool was found to be plant. CA22060
• In Schofield v R & H Hall Ltd 49TC538 a silo for temporary storage was found to be plant.

Those cases predate the statutory exclusions for buildings (CA22010) and structures (CA22020). Today, most buildings and structures are excluded from PMAs, although there are some exceptions, see CA22020 and CA22030. Some of the exceptions are for assets which were found to be plant by the courts before the exclusions were introduced, including the assets identified above. This means that dry docks, swimming pools and silos for temporary storage, for example, can still qualify for PMAs if they meet the common law test.

The common feature of the cases listed above is that they all involved structures (dry dock, swimming pool and grain silo) rather than buildings.

In each of the cases the structure acted as more than premises or setting. For example, the dry dock in Barclay Curle transported the ships to and from the river.

In the Barclay Curle case the company traded as shipbuilders. It built a dry dock and claimed PMAs on it. The Inspector refused the claim. The case went all the way to the House of Lords who allowed it. The dry dock transported ships to and from the river and so effectively it was apparatus with which the company carried on its trade.

In Schofield v Hall a grain silo was found to qualify for PMAs. It distributed the grain it contained and so it functioned as apparatus.

Treat a grain silo as plant where, together with its attendant machinery, it performs a function in distributing the grain so that acts as a transit silo rather than a warehouse.

The cases where a structure was held to be plant show that a building or structure can be plant in common law if and only if it is apparatus for carrying on the business or employed in the business rather than being the premises or place in which the business is carried on.

There was an Australian case (Wangaratta Woollen Mills Ltd v Commissioner of Taxation of the Commonwealth of Australia (1969) 43ALJR324) which you may find people quote against you. In that case a dyehouse, apart from the external walls and roof, was held to be plant. The dyehouse was held to be a complex whole in which every piece was essential for the efficient operation of the whole. What you must remember is that the external walls and roof were held not to be plant and so the building as a whole was not plant.