Capital Allowances Act 2001 section 46

General exclusions

Section 46 sets out the general exclusions that prevent certain types of expenditure on plant and machinery from qualifying for first-year allowances, while also identifying specific exceptions where those exclusions do not apply.

• Expenditure on plant and machinery is excluded from first-year allowances in defined circumstances, including where it is incurred in the final period of a trade, on cars, on assets for leasing, or on assets previously used for other purposes or received as gifts.
• The car exclusion does not apply to expenditure on cars with low CO2 emissions (which can still qualify under section 45D), and the leasing exclusion does not apply to full expensing under section 45S where the lease is an excluded lease of background plant or machinery for a building.
• Expenditure is also excluded where the purchase of plant or machinery is linked to a change in another person's trade or business and one of the main purposes of that change is to obtain a first-year allowance.
• Expenditure that would be treated as long-life asset expenditure were it not for transitional provisions is likewise excluded from first-year allowances.