Introduction to this document

Flow chart - capital allowances short-life asset election

Tax relief on the cost of equipment you acquire for your business is spread over

decades unless your purchases are covered by the annual investment allowance or first-year allowance. However, its possible, subject to conditions, to accelerate this by making a short-life asset election.


Flow chart

The Flow Chart - Capital Allowances Short-life Asset Election will guide you through the conditions that must exist for a valid short-life election to be made on an item of plant or machinery.

Definitions for the flow chart:

  • Plant and machinery - there is no statutory definition of plant or machinery. In fact, there is no precise definition for tax purposes. There is considerable case law and HMRC commentary on the subject which relies largely on a common sense and practical approach. In brief, machinery is any physical asset which has moving parts while plant is any asset, static and without moving parts, which has a practical function itself or ancillary to an item of machinery, e.g. a lift shaft.

For HMRC guidance on what counts as plant or machinery, visit

  • Unincorporated business - a sole trader, business partnership or, for the purposes of capital allowances, a limited liability partnership
  • Excluded asset - an asset for which the legislation specifically prohibits the use of a short-life asset election.


You may find our sample Short-life Asset Election useful in conjunction with the flow chart.


Flow chart - capital allowances short-life asset election

15 Dec 2020
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