Capital Allowances Act 2001 section 186A

Fixtures on which a business premises renovation allowance has been made

Section 186A limits the amount of plant and machinery capital allowances a new owner can claim on fixtures that were previously part of an asset on which business premises renovation allowances (BPRA) had been claimed.

• When a past owner has claimed BPRA on a qualifying building and a balancing event causes that asset (or part of it) to change hands, any plant or machinery fixtures within that asset are subject to a cap on the new owner's allowances.
• The new owner's qualifying expenditure on the fixture is limited to a maximum allowable amount; any expenditure above this cap is disregarded for capital allowances purposes.
• Where the balancing event proceeds exceed the past owner's net unrelieved BPRA expenditure, the cap is calculated using the formula F × R ÷ T, where F is the portion of proceeds attributable to the fixture, T is total proceeds, and R is the past owner's original qualifying expenditure minus net BPRA allowances previously given.
• Where the proceeds do not exceed the past owner's net unrelieved expenditure, the cap is simply the portion of the balancing event proceeds attributable to the fixture.