A part (usually a percentage) of the cost of capital equipment that a company is allowed to set aginst its annual income for the purposes of calculating its tax bill. The rules on capital allowances are to be found in a country’s tax legislation.
Tax allowances which the owner of equipment claims against his taxable income. In leasing it is the lessor, rather than the lessee, who claims capital allowances. They represent the recognition of depreciation in the tax system.
A tax deduction for the annual write-off of the shell of a building used to produce assessable income. The rate at which a building can be written-off depends on when it was first built.