IHTM25227 - Land and buildings,
machinery and plant: Machinery or plant
The IHTA 1984 does not define either "machinery" or "plant". For
the purposes of IHTA84/S105 (1)(d), we treat the expression
"machinery or plant" as including those assets, and only those
assets, which are treated as machinery or plant for Income Tax
purposes.
The expression "machinery or plant" normally presents no
difficulty for IT purposes and similarly should not do for IHT
purposes.
By reference to IT case law, the broad requirements for
equipment to be "plant" for the purposes of IHTA84/S105 (1)(d) are
that it:
- functions as part of the means by which the
company or partnership carried on its business (other than
stock-in-trade bought or made for sale), and
- has a working life of two years or more
(This text has been withheld because of exemptions in the
Freedom of Information Act 2000)
(This text has been withheld because of exemptions in the
Freedom of Information Act 2000)
(This text has been withheld because of exemptions in the
Freedom of Information Act 2000)
For IT, equipment may be entitled to either:
- a writing-down allowance on a percentage
basis if it is machinery and plant, or
- an allowance on a renewals basis, i.e. by
reference to the actual expenditure on replacement, if it is not
machinery and plant.
(This text has been withheld because of exemptions in the
Freedom of Information Act 2000)
Accordingly equipment should be treated as plant or machinery
where:
- writing-down allowances have been given in
respect of it (ignore the possibility that in strictness the
renewals basis may have been appropriate for some of the items),
or
- writing-down allowances have not been
given in respect of it, if it is clear on enquiry that this has
occurred for some reason unconnected with the nature of the
equipment (for instance because in the particular case neither form
of allowance can be claimed, or because the renewals basis has been
adopted for convenience).
In exceptional cases of doubt or difficulty as to whether items
in respect of which relief is claimed are properly within the
description of machinery or plant Technical Division may be asked
for assistance through Technical Group (TG).
You should refer any case where the definition of machinery
and plant adopted for income tax purposes is challenged to TG.
