SE36880 - Deductions from emoluments: capital allowances – procedures - emoluments chargeable under Case II and Case III of Schedule E

Section 198(2) ICTA 1988

Case II

Employees within Case II of Schedule E are only taxed on the emoluments for their UK duties (see SE40003). Such employees are entitled to capital allowances for plant and machinery that satisfies the conditions in SE36520, but only to the extent that it is used in the performance of their UK duties. Use in the performance of duties outside the UK is treated as non-business use for the purpose of the apportionment in SE36570.

Case III

No deduction for capital allowances can be given from emoluments chargeable under Case III of Schedule E.

For guidance on the way that the Schedule E expenses rule in Section 198 ICTA 1988 applies to employees chargeable under Case II and Case III of Schedule E, see SE31750 onwards.