The capital allowance legislation specifically denies tax relief for plant and machinery installed in a dwelling house. However, plant and machinery installed in the common areas of blocks of flats such as hallways, stairs and lift shafts would qualify as the flats themselves are the dwellings, not the building as a whole.

HMRC have recently confirmed their view that common areas in Houses of Multiple Occupation (HMO) are parts of a ‘dwelling house’ and ineligible for capital allowance claims.

This would seem inconsistent with the treatment of blocks of flats, and there may be a test case on the interpretation, particularly as there is no definition of a ‘dwelling house’ in the tax legislation.

There is also a lack of clarity concerning the status of university halls of residence, where there is often substantial expenditure on plant and machinery in common areas.