Background
The appellant company purchased a retirement home in September 2004 for £940,000. Within the grounds of the property was a swimming pool for use by residents of the nursing home. The swimming pool was enclosed by a large conservatory-type covering.
The appellant and HM Revenue & Customs (HMRC) agreed that capital allowances were due on the swimming pool. However, HMRC refused the appellant’s capital allowances claim in relation to the conservatory. In addition, HMRC reduced the appellant’s capital allowances claim in respect of the swimming pool using an apportionment formula, and using a valuation of the swimming pool (£45,596) that was lower than the valuation used by the appellants (£84,000). The appellants appealed.
The First-tier Tribunal (FTT) therefore had to consider the following issues for capital allowance purposes: whether the conservatory
