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Shipping container - capital allowances?

Shipping container - capital allowances?

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Client has purchased a metal shipping container to hold a diesel generator and some affiliated equipment.  I'm thinking it's effective a prefab building and no CAs are due.  It could be moved, but won't actually be moved in the course of this trade.  Anyone see a case for capital allowances?

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By Steve Kesby
03rd Jan 2013 10:28

I'd argue...

... that it's not a building (which is where the requirement for it to actually be moved in the course of the trade would come in), because it doesn't have any windows (assuming it hasn't had windows "installed").

It won't then satisfy the definition of a structure (a fixed structure of any kind other than a building) in S.22(3)(a) CAA 2001, unless it is actually fixed (to something - the land/a building).

I'm not sure that it could be regarded as plant (and it's not machinery) of itself though, so you'd need to argue your way around general function v setting principles as well.

EDIT: On reflection, I'm not sure that windows or the lack of them is determinative, because you can have buildings without windows, but it doesn't feel like a building to me; it's just a big box that you put things in.  It does seem to me to be down to general principles though.

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By thisistibi
03rd Jan 2013 15:16

@Steve

Thanks for your reply, I'm not sure if you reached a conclusion since I still don't believe it is "plant" as it's not actively used in the trade - it's part of the setting, used to house the electrical equipment.  I can't seem to talk myself into claiming allowances!

Interestingly, the electrical equipment is sold together with the container as a "containerized solution" which avoids the need to install the electrical elements into a building at additional costs.  So it seems the whole thing comes as an integrated unit - which does give me grounds to claim all the cost as one thing - plant.

Annoyingly, they also bought a back up generator together with an empty container to house it and I can't use the "integrated" argument for that one.

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Replying to thegreatgrumbleduke:
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By Euan MacLennan
03rd Jan 2013 16:31

Stock?

thisistibi wrote:

Interestingly, the electrical equipment is sold together with the container as a "containerized solution" which avoids the need to install the electrical elements into a building at additional costs.  So it seems the whole thing comes as an integrated unit - which does give me grounds to claim all the cost as one thing - plant.

 

Doesn't that make the container and contents simply trading stock or WIP?

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Replying to WhichTyler:
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By thisistibi
03rd Jan 2013 21:54

Um

Euan MacLennan wrote:

thisistibi wrote:

Interestingly, the electrical equipment is sold together with the container as a "containerized solution" which avoids the need to install the electrical elements into a building at additional costs.  So it seems the whole thing comes as an integrated unit - which does give me grounds to claim all the cost as one thing - plant.

 

Doesn't that make the container and contents simply trading stock or WIP?

Not in this case as my client is buying for use in his trade...

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By philfromleeds
03rd Jan 2013 22:49

Temporary buiding

 

We downsized. I used to have an office in the old home. I bought a second hand metal unit, purpose made. They are usually on building sites. The contractor I am sure would either rent them as plant or buy them. THESE ARE TEMPORARY BUILDINGS. If I would have made any profit I would have claimed AIA. If I paint it every year it might last a long time.

I actually think it will go up in value because its metal.If your client paid only a little because his was preloved his might go up in price. Your client must buy a good metal paint. I bought my paint from Pronto Paints Ltd in Chesterfield. The olive green is a great colour. If the container is not on legs did he put it on something that would stop the damp rising up it. Its a shame when they go rusty on the bottom.

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By Euan MacLennan
04th Jan 2013 09:36

Sorry - I misunderstood

When you said "the electrical equipment is sold together with the container as a "containerized solution"", I assumed that your client had bought the container and equipment and was putting them together for sale to a customer.  Apparently not.

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By Steve Kesby
04th Jan 2013 11:57

I feel more bullish now

I accept philfromleeds point that where you buy something that is essentially a prefabricated building, then there's no escaping the fact that it's a building.

With storage containers though, a quack test says to me that it's not a building, taking you to general function v setting principles.

For the purchased unit (call it a weather-proof integrated generator solution!), I'd feel reasonably bullish about arguing that the whole thing is plant, personally.

For the constructed unit (constructed to emulate and "understudy" for the first), I can't then see any reason to treat it differently.

I'd try and develop a tenable filing position based on this line of thought, warn the client of the possibility of HMRC disagreeing and of its effect, and make an appropriate white space disclosure to protect the discovery position.

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By thisistibi
04th Jan 2013 17:07

Thanks Steve

Really useful to have a second opinion.

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By aztec08091988
16th Dec 2013 08:29

cargo

A shipping container purchased serves as a storage and utility shed.

www.azteccontainer.com

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