188ÌåÓý

CAA01/S46

All of the CAA01/S46(2) general exclusions from FYAs apply to full expensing and the 50% FYA, subject to an exception from General exclusion 6, the leasing exclusion, for background plant and machinery (see below). There is guidance on the general exclusions at�CA23113. The following additional guidance may be particularly relevant when considering claims to full expensing and the 50% FYA.

General exclusion 2 � expenditure on the provision of a car

Expenditure incurred on the provision of a car is not eligible for full expensing or the 50% first-year allowance. CAA01/S268A defines a car for the purposes of capital allowances and there is guidance at�CA23510.

General exclusion 5 � long-life asset expenditure

The effect of General Exclusion 5 is sometimes misunderstood. It does not prevent long-life asset expenditure from qualifying for FYAs. It only excludes expenditure that would be long-life asset expenditure but for transitional provisions in CAA01/SCH3/PARA20. In practice, you may find it helpful to disregard General Exclusion 5 as it will only apply to expenditure that is already excluded from full expensing and the 50% FYA under other conditions (either because the expenditure was incurred before 1 April 2023 or because the plant or machinery is second hand). Long-life asset expenditure (see CA23700) is within the scope of the 50% FYA as long as the standard conditions are met.

General exclusion 6 � plant or machinery for leasing

Expenditure on the provision of plant or machinery for leasing is excluded from the scope of full expensing and the 50% FYA.�CA23113 provides further guidance on General Exclusion 6. There is a distinction between the leasing or hiring of an asset and the provision of services that involve the use of an asset�(CA23115).

Background plant or machinery in building for leasing

CAA01/S46(4A) contains an exception to general exclusion 6 (expenditure on the provision of plant or machinery for leasing) where the lease is an “excluded lease of background plant or machinery for a building� as defined by CAA01/S70R CA23835.