Capital Allowances Act 2001 Schedule 3 paragraph 35

Purchaser of land discharging obligations of equipment lessee

Schedule 3 paragraph 35 modifies the rules in section 182 for purchasers of land who take on the obligations of an equipment lessee, where the land interest was acquired before 24th July 1996.

• Section 182 normally allows a purchaser of land to claim plant and machinery allowances on fixtures when they discharge the obligations of an equipment lessee.
• For purchases made before 24th July 1996, an additional condition applies: at the time of purchase, either no one must have previously claimed capital allowances on the fixture, or if someone has, that person must have brought the disposal value into account.
• This extra requirement ensures that allowances are not duplicated — if a previous owner already claimed allowances on the fixture, there must have been a proper disposal event before the new purchaser can claim.
• This transitional rule only affects land interests acquired before 24th July 1996; purchases on or after that date follow the standard section 182 rules without this additional condition.