CA10020 - Scope of manual

This manual contains guidance about capital allowances.

Capital allowances let taxpayers write off the cost of certain capital assets against taxable income. They take the place of depreciation charged in the commercial accounts, which is not normally deductible for tax purposes.

Not every type of capital expenditure qualifies for capital allowances. For example, expenditure on the following does not qualify:

  • commercial buildings (apart from expenditure on buildings qualifying for Enterprise Zone Allowances, Research & Development Allowances or Business Premises Renovation Allowances)
  • residential buildings
  • land
  • some intangibles, such as trade marks and goodwill.

The capital allowances currently available are given for capital expenditure on:


  • the provision of machinery or plant
see CA20000 onwards
  • the conversion or renovation of unused space above shops and other commercial premises into flats
see CA43000 onwards
  • the conversion or renovation of unused business premises in Assisted Areas
see CA45000 onwards
  • mineral extraction
see CA50000 onwards
  • research and development (formerly scientific research)
see CA60000 onwards
  • know-how
see CA70000 onwards
  • patents
see CA75000 onwards
  • dredging
see CA80000 onwards
  • constructing buildings for letting under the assured tenancies scheme (but only for expenditure incurred in 1982 - 1992)
see CA85000 onwards

Capital allowances for the following were abolished with effect from 1 April 2011 for corporation tax purposes and 6 April 2011 for Income tax purposes


industrial buildings, qualifying hotels and commercial buildings in enterprise zones see CA30000 onwards
agricultural buildings and works see CA40000 onwards