Capital Allowances Act 2001 section 440

Excluded expenditure: land

Section 440 prevents the cost of acquiring land from qualifying for capital allowances, while preserving allowances for buildings, structures, and plant or machinery situated on that land.

• Expenditure on acquiring land, or rights in or over land, does not count as qualifying expenditure for capital allowances purposes.
• However, this exclusion does not apply to the extent that the expenditure relates to a building or structure already on the land, rights in or over such a building or structure, or plant or machinery forming part of such a building or structure.
• Where expenditure covers both land and qualifying assets on that land, it must be split between the two on a just and reasonable basis.
• The effect is that when you purchase a property, you must identify and separate the land element from the value attributable to buildings, structures, or qualifying plant and machinery.