The FTT decides on the eligibility for capital allowances on the construction of a silo provided for temporary storage.
The First-tier Tribunal (FTT) has released its decision in the case of Stephen May v HMRC. The case deals with capital allowances on the construction of a silo provided for temporary storage, specifically whether the facility was ‘plant’ for the purpose of CAA2001 s23 List C Item 28(a) and under its common law meaning. In summary, HMRC sought to argue that no capital allowances were available given the facility was a ‘building’ for the purposes of CAA2001 s21 and grain was not stored in a ‘silo’, nor was it stored there temporarily. The FTT allowed the taxpayer’s appeal, comprehensively establishing that the facility in question was ‘plant’ in its entirety and met all the required conditions of CAA2001 s23 to qualify for capital allowances in full.
The key technical matters that came out of the case include:
The specifics of the case are particular to the facility constructed by the Appellant but they do give us guidance on important technical and commercial aspects that have wider application.
Taxpayers and advisers dealing with the tax treatment of such facilities should carefully consider the pertinent technical points raised from this case before claiming capital allowances in respect of temporary storage silos. Advice should be sought at an early juncture to ensure a robust technical assessment is obtained to check the validity of each case.
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