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The uniform capital allowance system

Last updated 7 April 2020

The uniform capital allowances system (UCA) provides a set of general rules that applies across a variety of depreciating assets and certain other capital expenditure. It does this by consolidating a range of former capital allowance regimes. These regimes were complex and inconsistent, and involved significant replication of parallel but not identical provisions and concepts. Most of these deficiencies are overcome by the consolidation of the capital allowance provisions. The UCA includes provisions relating to:

  • plant
  • software
  • mining and quarrying
  • intellectual property
  • forestry roads and buildings, and
  • spectrum licences.

The UCA maintains the treatment of some depreciating assets and capital expenditure such as certain primary production depreciating assets and capital expenditure.

It also introduces new deductions for types of capital expenditure that did not previously attract a deduction, such as certain business and project related costs - see Capital expenditure deductible under the UCA.

You use the UCA rules to work out deductions for the cost of your depreciating assets, including those acquired before 1 July 2001. You can generally deduct an amount for the decline in value of a depreciating asset you held to the extent that you used it for a taxable purpose.

However, eligible taxpayers who elect to enter the simplified tax system (STS) will generally work out deductions for their depreciating assets under the STS rules - see STS taxpayers.