First Year Allowances

The current First Year Allowances have gone hand in hand with the prior regime of Super Deductions and now the current Full Expensing regime.  They have run in parallel being enacted simultaneously and follow the same guiding principles.

These allowances are given at only 50% of the qualifying Special Rate expenditure, but this is still a significant uplift from the base of 6% per annum for those assets, commonly referred to as Integral Features Assets.   

A new 40% first year allowance has been enacted as effective from 1 January 2026 for main pool Plant and Machinery assets where Annual Investment Allowances have been fully utilised or more importantly for unincorporated businesses that  do not qualify for Full Expensing.