Quay wall functioned as plant, not premises

The taxpayer was the operator of the Port of Liverpool. Between 2013 and 2017 it developed Liverpool2 a new deep-water container terminal at the port. This involved building a quay wall next to the river and a container transition area (CTA) of reclaimed land. It claimed capital allowances on the cost of building the wall.

HMRC said the wall was not plant or machinery and therefore did not qualify for capital allowances. If it was plant or machinery the expenditure was excluded by CAA 2001 s 22 list B item 5 (dock harbour wharf pier marina or jetty) and not saved by s 23 list C.

The taxpayer appealed.

The First-tier Tribunal found that the primary purposes of the wall were to provide mooring for ships and to provide support for the ship-to-shore cranes. Both were key functions and essential to...