Capital Allowances Act 2001 section 254

Introductory

Section 254 introduces the rules that determine how plant and machinery allowances and charges are handled for management assets held by companies carrying on long-term (life assurance) business.

• Sections 255 and 256 apply when a company carrying on any long-term business is entitled or liable to allowances or charges for a chargeable period in respect of plant or machinery that is a management asset.
• A "management asset" has the same meaning as in Chapter 1 of Part 12 of the Act, which deals with life assurance business.
• The rules require allowances and charges to be apportioned between different categories of life assurance business, because each category may be taxed on a different basis.
• Once apportioned, the allowances and charges are given effect differently depending on whether they relate to basic life assurance and general annuity business (BLAGAB) or to other categories such as pension, ISA, life reinsurance, or overseas life assurance business.