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Home > QFINANCE Dictionary > Definition of capital allowance

Definition of

capital allowance


tax allowance for new plant and machinery in the United Kingdom and Ireland, an allowance against income or corporation tax available to businesses or sole traders who have purchased plant and machinery for business use. The rates are set annually and vary according to the type of fixed asset purchased, for example, whether it is machinery or buildings. This system effectively removes subjectivity from the calculation of depreciation for tax purposes.

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Definitions of ’capital allowance’ and meaning of ’capital allowance’ are from the book publication, QFINANCE – The Ultimate Resource, © 2009 Bloomsbury Information Ltd. Find definitions for ’capital allowance’ and other financial terms with our online QFINANCE Financial Dictionary.

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