Capital Allowances Act 2001 section 186

Fixture on which an industrial buildings allowance has been made

Section 186 restricts the amount of plant and machinery allowances a new owner can claim on a fixture where the previous owner had already claimed industrial buildings allowances on expenditure that included that fixture.

• Where a previous owner claimed industrial buildings allowances on expenditure that included a fixture, and then transferred their interest, the new owner's plant and machinery claim on that fixture is capped at a maximum allowable amount.
• If the total transfer consideration exceeds the residue of qualifying expenditure, the cap is calculated as the fixture's share of the transfer price, scaled down by the ratio of the residue to the total consideration.
• If the total transfer consideration does not exceed the residue of qualifying expenditure, the cap is simply the portion of the transfer consideration attributable to the fixture.
• The current owner for these purposes is either the person who acquired the interest directly from the past owner, or any person subsequently treated as the owner of the plant or machinery.