A discovery assessment by HM Revenue and Customs (HMRC) disallowing a capital allowances claim in respect of expenditure on plant and machinery in ‘communal areas’ of properties used in a rental property business was upheld by the tribunal.  
 
Background 
 
The appellant’s self-assessment return for the tax year 2011/12 claimed a deduction from property income for capital allowances purposes (i.e. annual investment allowance (AIA)) and also a 10% wear and tear (W&T) allowance. HMRC accepted the return without enquiry. 
 
In April 2015, during the course of an enquiry into the appellant’s return for the following tax year 2012/13, HMRC discovered that the appellant’s AIA claim for 2011/12 related to expenditure on three residential properties in his property business which he let as houses of multiple occupancy (HMOs).