Capital Allowances on a Care Home
Written and reviewed by the Care Home Accountants editorial team. Last reviewed 28 July 2026.
A care home holds a great deal of value in fixtures, plant and integral features, and much of that qualifies for capital allowances against taxable profit. Knowing what falls where turns a large spend into tax relief.
We set out the annual investment allowance, the special rate for integral features, and why the position on the building itself under the Structures and Buildings Allowance is not settled.
The Annual Investment Allowance
The annual investment allowance gives a full deduction in the year of spend for qualifying plant and machinery, up to £1,000,000 a year. For a care home refurbishing rooms, replacing equipment or fitting out a new wing, this is the main route to immediate relief.
Identifying every qualifying item is where the value sits, and it runs alongside the wider care home accounts so nothing eligible is missed. The government explains the annual investment allowance and what counts as qualifying spend.
Integral Features and the Special Rate
Integral features are parts of the building that count as plant for allowances, such as electrical systems, cold and hot water systems, heating, air conditioning and lifts. These clearly qualify in a care home, where they are extensive.
Integral features sit in the special rate pool and attract writing down allowances at 6% a year where they are not covered by the annual investment allowance. In the year of spend the annual investment allowance can still give a full deduction up to its limit.
Fixtures and Plant in the Building
Beyond integral features, a care home is full of loose and fixed plant that qualifies: beds and hoists, nurse call systems, kitchen and laundry equipment, sanitary ware and fitted furniture. These are the items that make the annual investment allowance worth claiming in full.
On a purchase, agreeing the value of these fixtures in the contract protects the claim, which is one reason the split matters when buying a care home. A pooled figure captured at the point of sale is far harder to recover later.
Structures and Buildings Allowance and the Dwelling Question
The Structures and Buildings Allowance gives relief at 3% a year on the cost of constructing or renovating commercial buildings. It expressly excludes dwellings, and whether a care home building counts as a dwelling for this purpose is not settled.
Because of that uncertainty, we lead on the annual investment allowance and integral features, which clearly apply, rather than assuming the building qualifies. The government guidance on the Structures and Buildings Allowance sets out the dwelling exclusion that drives the caution.