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Are capital allowances claimable in respect of a water borehole?
A farming company operates from land owned personally by two of the directors. The company currently has several hundred head of cows and is expanding its herd. The water bill to feed these animals is substantial and the company has decided to sink a borehole on the land owned by the directors.
Presumably the cost of the pumps water tanks filtration system etc will all qualify for annual investment allowance. However we are wondering whether the borehole itself will be classed as plant or will it be deemed an enhancement to the land value.
On the other hand the plant and machinery to extract and purify the water can have no function without the borehole being sunk. Consequently could it be classed altogether as one piece of plant and machinery and therefore qualify for annual investment allowance?
Query 18 431 – Diviner
