The special rate pool was introduced by Finance Act 2008 for qualifying expenditure incurred on or after 1 April 2008.

Expenditure that must be allocated to the special rate pool includes that incurred on:

  • the provision or replacement of integral features
  • long life assets
  • thermal insulation of buildings used in a businesss
  • cars with CO2 emissions of more than 160 g/km (see the Capital allowances on cars guidance note for further details)

When the special rate pool was first introduced, writing down allowances on assets in that pool were available at a rate of 10%. It was announced in the Emergency Budget on 22 June 2010 that the rate of relief was to be reduced to 8% for expenditure incurred on or after 1 April 2012.

Where the applicable rate of capital allowances changes part way through the accounting period, a hybrid rate applies. For a 31 December 2012 year end, the hybrid rate will be 8.5% (). Further details can be found in CA23220.

Special rate pool and the AIA

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