B Tax: Capital items

reader

Hi guys

Does anyone know why my B Tax book says that a swimming pool in a caravan park would be considered as plant whereas a football stand would not be considered as plant? Surely a football stand is required for trade (to allow customers to sit down) in the same way a swimming pool may be needed in a caravan park (to allow customers to swim).

Thanks in advance

Monsoon

Off the top of my head....

There is a distinction between using an item in order to carry out your trade, and providing the setting in which the trade is carried out. The former is plant and the latter is not and is therefore diallowable to capital allowances.

A swimming pool is used (therefore plant) and a football stand merely forms the setting, it's a building, not an item that's used.

Look at an office. The room itself provides no function, it just forms the setting in which the trade is carried out and is therefore not plant. A football stand is the same, though I would hope the seats are allowable, and just the fabric of the building that is not.

reader

Thanks a lot, Monsoon

That makes sense- football stand = setting, whereas swimming pool = trade activity

Well put.