The short answer
The special rate pool holds qualifying plant and machinery that receives writing-down allowances at 6% a year, including integral features, certain long-life assets, solar panels, added thermal insulation and some cars. Faster relief may be available: AIA can give a 100% deduction within its limit, while companies can claim a 50% first-year allowance on qualifying new and unused special-rate assets.
What is the special rate pool?
The special rate pool is the capital-allowances pool for plant and machinery that receives writing-down allowances at the special rate. At 5 September 2026, that rate is 6% a year on a reducing balance.
Putting expenditure in the special rate pool does not always mean waiting for 6% relief. The Annual Investment Allowance can provide a 100% first-year deduction for qualifying special-rate expenditure within the available annual limit. Companies can also claim a 50% first-year allowance on qualifying new and unused special-rate plant and machinery, with the remaining balance entering the pool.
Classification comes before calculation
The pool describes how unrelieved expenditure is carried forward. First establish whether the item is qualifying plant and machinery and whether it is special-rate expenditure. Then consider any faster allowance that is available and worth claiming.
Which assets go into the special rate pool?
| Category | Current rule | Important boundary |
|---|---|---|
| Integral features | Specified systems integral to a building or structure are special-rate expenditure. | The statutory list is specific. Other fixtures are not moved to the special-rate pool merely because they are fixed to a building. |
| Long-life assets | Plant or machinery with an expected useful economic life of at least 25 years can be special-rate expenditure. | For many businesses, the long-life rules do not apply where relevant expenditure is no more than the adjusted £100,000 annual limit. Exceptions and group rules apply. |
| Solar panels | Capital expenditure on solar panels is specifically designated as special rate. | Eligibility for plant and machinery allowances and any available first-year route must still be checked. |
| Thermal insulation | Qualifying capital expenditure adding insulation against heat loss to an existing building is special rate. | Original-construction insulation and dwelling-house restrictions require separate treatment. |
| Higher-emission cars | Cars above the applicable CO₂ threshold enter the special rate pool. | The threshold depends on the car and acquisition date. Cars cannot receive AIA, full expensing or the 50% first-year allowance. |
What counts as an integral feature?
HMRC’s current integral-feature list covers:
- lifts, escalators and moving walkways;
- space-heating and water-heating systems;
- air-conditioning and air-cooling systems;
- hot- and cold-water systems, excluding toilet and kitchen facilities;
- electrical systems, including lighting systems; and
- external solar shading.
The system is considered as a whole. For example, HMRC’s detailed guidance treats a powered ventilation, air-cooling or purification system together with floors or ceilings comprised in that system. A loose asset connected to the system is not automatically part of the integral feature, and a fixture outside the statutory list may instead be main-rate plant or non-qualifying building fabric.
Usually special-rate systems
- Building-wide electrical distribution and lighting.
- Mechanical heating and hot-water systems.
- Air-conditioning and powered cooling.
- Lifts and escalators.
- Qualifying external solar shading.
Requires separate analysis
- Kitchen and toilet fittings.
- Business-specific machinery connected to services.
- Ordinary building fabric and structures.
- Local controls, specialist equipment and trade fixtures.
- Repair expenditure already deductible as revenue.
When is an asset a long-life asset?
The test considers the asset’s expected useful economic life from when any person first brings it into use until it is no longer likely to be used as a fixed asset by any business. It is not limited to the claimant’s expected ownership period. An asset expected to be sold and used by another business can therefore have a longer tax life than its accounting life for the current owner.
The threshold is at least 25 years. For companies, individuals and partnerships of individuals, the long-life rules normally do not apply where total relevant long-life expenditure in the chargeable period stays within £100,000 for a 12-month period. That limit is adjusted for periods of different lengths and for company groups, and some expenditure is excluded from the protection.
- 01
Identify the whole asset
Apply the test to the plant or machinery as a whole rather than shortening the life by isolating replaceable components without justification.
- 02
Estimate total business use
Consider use by previous and expected future owners, not only the claimant’s depreciation policy or disposal plan.
- 03
Aggregate the expenditure
Test relevant long-life expenditure against the adjusted monetary limit for the period and group.
- 04
Check another special-rate category
An integral feature remains special rate even where the long-life monetary limit is not exceeded.
Are repairs to integral features capital expenditure?
Ordinary repairs can remain revenue expenditure, but a specific replacement rule applies to integral features. If expenditure represents the whole, or more than 50%, of the cost of replacing the integral feature, the whole amount is treated as capital expenditure on the replacement. Related expenditure within a 12-month period is considered together.
This prevents a substantial system replacement being divided into smaller invoices and treated as repair expenditure. The assessment should define the overall feature, compare the work with the cost of replacing it, and distinguish maintenance from improvement or replacement.
Which allowance should be claimed?
| Route | First-year deduction | When it may be relevant |
|---|---|---|
| Annual Investment Allowance | 100%, within the available £1 million annual limit | Most qualifying special-rate plant and machinery. Businesses commonly prioritise AIA for assets that would otherwise receive the slowest writing-down rate. |
| 50% first-year allowance | 50%; the balance enters the special rate pool | Companies acquiring qualifying new and unused special-rate plant and machinery where AIA is unavailable, exhausted or allocated elsewhere. |
| Special-rate writing-down allowance | 6% a year on the reducing pool balance | Qualifying expenditure not relieved by AIA or another first-year allowance, including second-hand special-rate assets. |
Full expensing is a 100% company allowance for qualifying main-rate plant and machinery, not special-rate expenditure. This is one reason a company may preserve AIA for integral features while using full expensing for eligible main-rate assets. The correct allocation depends on all expenditure, annual limits and the company’s tax position.
A worked special rate pool example
Assume a company buys £100,000 of new, unused qualifying integral features. Its AIA is already fully used, but the expenditure meets the conditions for the 50% first-year allowance. The accounting period is 12 months and there are no private-use or other adjustments.
| Qualifying expenditure | £100,000 |
|---|---|
| 50% first-year allowance | £50,000 |
| Balance entering the special rate pool | £50,000 |
| 6% writing-down allowance on that balance | £3,000 |
| Total illustrative first-year deduction | £53,000 |
| Pool carried forward before later additions/disposals | £47,000 |
If £100,000 of AIA were available and allocated to the same expenditure, the qualifying first-year deduction could instead be £100,000. The example shows how the 50% allowance and special-rate pool interact; it is not a recommendation or estimate for a particular business.
How does the pool affect a property purchase?
Integral features acquired with a commercial property can form part of the fixtures value transferred from the seller. A joint section 198 election can fix the seller’s disposal value and purchaser’s qualifying expenditure. Main-rate fixtures and special-rate integral features should be identified separately because they enter different pools.
The election cannot create a value above the seller’s qualifying expenditure or the amount attributable to the fixture. The seller’s pooling history and the statutory fixed-value requirements also matter. Review the fixtures position during transaction due diligence and preserve asset-level evidence rather than relying on a single undifferentiated property figure.
What records support the classification?
Evidence to retain
- Asset descriptions, invoices and fixed-asset register entries.
- Mechanical, electrical and public-health specifications.
- Drawings showing the extent of each building system.
- Commissioning information and expected asset life.
- Replacement scopes and the 12-month expenditure chronology.
- AIA, first-year allowance and pool calculations.
- Property purchase elections and seller pooling evidence.
- Disposal proceeds and asset-use records.
The tax computation should reconcile additions, first-year claims, writing-down allowances, disposals and the closing special-rate pool. For construction projects, the underlying cost plan should show how preliminaries and professional fees were allocated to the assets they support.
For help reviewing asset classifications and a property’s fixtures history, explore our capital allowances service.
Frequently asked questions
Is every fixture in a building special rate?
No. Integral features on the statutory list are special rate, but other qualifying fixtures can be main rate. Some items form part of the non-qualifying building fabric. Function, legislation and the actual specification determine the treatment.
Can AIA be used on integral features?
Yes, most qualifying integral-feature expenditure can receive AIA within the available limit. AIA can be allocated between qualifying asset categories, and special-rate expenditure is often prioritised because its ordinary writing-down rate is lower.
Can full expensing be used on special-rate expenditure?
The 100% full-expensing allowance applies to qualifying main-rate plant and machinery. Qualifying new and unused special-rate expenditure can instead receive the 50% first-year allowance, or AIA where available.
Do second-hand integral features qualify?
They can enter the special rate pool where the claimant is entitled to plant and machinery allowances, but the 50% first-year allowance requires new and unused assets. A property acquisition must also satisfy the fixtures pooling and fixed-value rules.
Does replacing half of a system trigger the integral-feature rule?
The rule applies where expenditure represents the whole, or more than 50%, of the cost of replacing the integral feature. Exactly 50% does not meet the “more than” limb unless the expenditure is the whole feature. Related expenditure within 12 months must be considered together.
Is a long accounting life enough to make an asset special rate?
No. The tax test considers at least 25 years of expected useful economic life across use by any business. The adjusted £100,000 monetary limit and other exclusions must then be checked.
Check the detail
Sources & scope
United Kingdom. Rates and rules are checked to 5 September 2026. The 6% special-rate writing-down allowance is current at that date. AIA, the 50% first-year allowance, long-life monetary limits, car-emission thresholds, accounting-period length, connected businesses, property fixtures, disposals and private use can change the result.
This is an InnoFund explanation, not official guidance or advice on a particular claim. The facts, relevant law and applicable scheme rules must be considered together.
Sources checked: 5 September 2026. This is separate from expert sign-off.
- HMRC: Rates and pools
Current special-rate categories, 6% rate, integral features and long-life threshold
- HMRC: Annual Investment Allowance
£1 million limit and asset exclusions
- HMRC Capital Allowances Manual: AIA qualifying expenditure
CA23084; allocating AIA to special-rate expenditure
- HMRC: Full expensing and 50% first-year allowance
Company and asset conditions for the 50% allowance
- HMRC Capital Allowances Manual: integral features contents
CA22300; statutory framework and related provisions
- HMRC Capital Allowances Manual: integral-feature assets
CA22330; detailed scope of listed systems
- HMRC Business Income Manual: repairs to integral features
BIM46945; whole or more-than-50% replacement rule
- HMRC Capital Allowances Manual: useful economic life
CA23722; 25-year test across business use
- HMRC Capital Allowances Manual: long-life monetary limit
CA23740; £100,000 annual threshold and adjustments
- HMRC Capital Allowances Manual: thermal insulation
CA22220; added insulation and special-rate treatment
- HMRC Capital Allowances Manual: solar panels
CA22335; solar expenditure designated special rate
- HMRC Capital Allowances Manual: fixtures election
CA26800; transferred values on property sales