Capital Allowances Act 2001 section 183

Incoming lessee where lessor entitled to allowances

Section 183 deals with how capital allowances for fixtures can be transferred from a lessor to an incoming lessee when a lease is granted over land containing those fixtures.

• Where a lessor grants a lease over land containing fixtures and is entitled to capital allowances on those fixtures, the incoming lessee can be treated as the owner of the fixtures for allowance purposes
• The lessee must pay a capital sum as part of the lease consideration that is treated as expenditure on providing the fixture
• The lessor and the lessee must not be connected persons, and both parties must jointly elect for the transfer of ownership to apply
• The election must be notified to HMRC within two years of the date the lease takes effect