Capital Allowances Act 2001 section 184

Incoming lessee where lessor not entitled to allowances

Section 184 deals with the circumstances in which an incoming lessee can claim capital allowances on fixtures when the lessor granting the lease is not entitled to allowances on those fixtures.

• Where a lessor who is not entitled to capital allowances on a fixture grants a lease, the incoming lessee can be treated as the owner of the fixture for allowances purposes
• The fixture must not have been used for a qualifying activity by the lessor or any connected person before the lease is granted
• The lessee must pay a capital sum as part of the lease consideration that is treated as expenditure on the provision of the fixture
• The lessee's ownership treatment is blocked if another person already has a prior right in relation to the fixture immediately after the lease is granted