Capital Allowances Act 2001 section 4

Capital expenditure

Section 4 defines "capital expenditure" and "capital sums" for the purposes of the Capital Allowances Act 2001, primarily by setting out what does not qualify as capital expenditure.

• Expenditure that can be deducted as a revenue expense in calculating trading, professional or property business profits is not capital expenditure
• Expenditure under the cash basis (except spending on cars) is excluded from being capital expenditure
• Amounts deductible from employment or office earnings — including mileage allowance relief, general employment deductions and pension contributions — are not capital expenditure
• Payments subject to income tax deduction at source (such as annual payments and certain patent royalties) are excluded from the definition on both the payer's and the recipient's side