CA23065 - Plant and Machinery Allowances (PMA): qualifying expenditure: sums received for depreciation
Sometimes a person who owns an asset and uses it for a qualifying activity receives sums to cover the depreciation of the asset while it is being used. In that case the person does not need a capital allowance to make up for the fact that depreciation is not an allowable deduction in computing profits because the depreciation of the asset has been fully covered. So the expenditure on the asset is not qualifying expenditure.
This does not apply if the sums to cover the depreciation of the asset are treated as income of the qualifying activity. In that case the expenditure on the asset is qualifying expenditure and qualifies for PMAs.