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Special rules apply for the claiming of capital allowances on the purchase of ‘integral features’ that comprise the following are relevant to property lettings:

• solar heating;
• electrical system, including a lighting system;
• cold water system;
• heating system, a powered system of ventilation, air cooling or air purification, and any floor or ceiling in such a system;
• lift or escalator.

Any item not on this list, even if it forms part of the building, is outside the scope of the integral features rules.

Expenditure on such assets in excess of any claim under the Annual Investment Allowance (AIA) is allocated to a ‘special rate’ pool of 8% on a written down balance.

Example:
Diana spends a total of £14,000 on ‘integral features’ for her properties. The AIA limit has already been exceeded for the period and writing down allowances (WDA) need to be claimed.

The expenditure is allocated to the ‘special rate’ pool, the calculation being:

Additions:
Electrical lighting system                        £10,000
Air conditioning                                       £  4,000
                                                                £14,000
WDA at 8%                                              £(1,120)
Balance of allowances carried forward   £12,880
Total allowances claim                            £ 1,120