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06 January 2015
Items that can be treated as fixed plant
A professional firm has moved offices. The capital gain made on the old premises is to be reinvested in new leasehold premises plant and equipment. HMRC’s Capital Gains Manual (at CG60960) states that whether assets can be regarded as “fixed plant” is a question of fact and degree to be decided by four basic tests.
- Whether the item purchased is plant or machinery rather than trading stock or part of the building.
- Whether the trader intends to hold the item in a particular location indefinitely for use in his trade.
- Whether the item’s location is essential to its function.
- The nature of the item should be considered to determine the means of permanent fixing available or necessary without the item becoming part of the land or buildings and without damaging...
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