Capital Allowances Act 2001 section 37

Exclusion where sums payable in respect of depreciation

Section 37 prevents capital allowances from being claimed on plant or machinery where the person providing it is already being reimbursed for the full depreciation of that asset.

• Expenditure on plant or machinery used in a qualifying activity does not qualify for capital allowances if the person providing it receives (or will receive) payments that cover the whole of the asset's depreciation
• The payments covering depreciation may be received directly or indirectly during the period the asset is used in the qualifying activity
• The exclusion applies where the payments are specifically in respect of, or take account of, the entire depreciation arising from the asset's use in that activity
• The exclusion does not apply if those depreciation-related payments are brought into account as the person's taxable income or included in the calculation of profits from their qualifying activity