Fixtures are plant and machinery which have been installed or fixed in a property and have become part of the building.

  • Fixtures are subject to special rules for capital allowances purposes.
  • Ownership of fixtures passes with the property to the new owner when it changes hands.
  • Integral features are a sub-category of fixture which come with extra rules covering repairs and improvements.
  • If capital allowances have not previously been fully claimed on fixtures, the new owner is treated as having incurred qualifying expenditure for capital allowances purposes on the cost of fixtures acquired.
  • Changes made to the fixtures rules by the 2012 Finance Act mean that the seller and buyer have a two year time limit in recognising and accounting for fixtures.
  • Ideally the seller should survey its own building as the value of the fixtures and their value in tax allowances may vastly affect the valuation of the building.
  • For sales since April 2014 the seller is required to not only set the value of the fixtures, this is normally via a s198 election, but also to pool its expenditure on fixtures otherwise the buyer may be restricted in the allowances it is able to claim in the future, see Fixtures: overview.
  • Prior to the FA 2012 changes, fixtures were frequently overlooked when a building changed hands: those dealing with the transaction were often unaware of their existence, or lacked the expertise to survey the building.
  • The purchase price of a building including its fixtures is apportioned according to s562 CAA 2001 on a just and reasonable basis, however the amount of any tax relief on fixtures is set by the 
  • Reapportioning purchase price may also affect tax goodwill and SDLT.
  • It is in the interest of all owners or potential buyers of commercial property to research the capital allowances history of a building prior to ownership/acquisition and consider whether it is possible to claim unclaimed capital allowances.

Rates of allowances

Fixtures are subject to different rates of allowances depending on whether they qualify as:

  • Plant and machinery.
  • Integral features: subject to special rules and rates of capital allowances.
  • Long-life assets: subject to the same rates of allowance as integral features but do not have the same replacement rules.

Any person who is buying or selling a commercial property, or block of flats should consider whether allowances have been fully claimed on fixtures by previous owners. The new owner of the building will be able to claim any unclaimed allowances providing he can establish the history of previous claims.

Further reading:

Fixtures: overview

Seller: should I make a s.198 election to fix sale price of fixtures? (archived)

Buyer: should I elect to fix the purchase price of fixtures? (archived)

See this case study to see how this all works in practice.

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