Capital Allowances Act 2001 section 15

Qualifying activities

Section 15 defines the types of activity that qualify for plant and machinery capital allowances under Part 2 of the Capital Allowances Act 2001.

• Capital allowances on plant and machinery are only available where the expenditure relates to a recognised qualifying activity, such as a trade, property business, profession or vocation, investment management, special leasing, or employment
• Allowances are restricted to the extent that the profits or gains from the activity are, or would be, chargeable to UK tax — so activities generating non-taxable income do not qualify
• Where a company has elected for its foreign permanent establishment profits to be exempt from UK tax, the business carried on through that establishment is treated as a separate, non-qualifying activity (though certain plant or machinery leases may be excepted from this rule)
• Additional restrictions apply to property businesses and special leasing (where plant or machinery is used in a dwelling-house) and to employments or offices (where qualifying expenditure and vehicle provisions are limited)