Capital Allowances Act 2001 section 101

Allocation of long-life asset expenditure to pool

Section 101 directs how capital expenditure on long-life assets is allocated to a specific capital allowances pool for writing-down allowance purposes.

• Expenditure on long-life assets must be allocated to the special rate pool under the rules in Chapter 10A of the Act.
• Where the expenditure does not need to be allocated to a single asset pool, it goes into the class pool for special rate expenditure.
• A separate pool is necessary because long-life assets attract a lower writing-down allowance rate than the main rate pool.
• The special rate pool for long-life assets continues until the qualifying activity (such as the trade) ceases — it does not close simply because its balance falls to a low level.