Capital Allowances Act 2001 section 187

Fixture on which a research and development allowance has been made

Section 187 restricts the amount of qualifying expenditure a current owner can claim on a fixture where a previous owner had already claimed a research and development (R&D) allowance on that asset.

• Where a previous owner claimed an R&D allowance on an asset that included plant or machinery now treated as a fixture, any new claim by the current owner is subject to a cap
• If the current owner's new expenditure exceeds the maximum allowable amount, only the maximum allowable amount counts as qualifying expenditure
• The maximum allowable amount is calculated by taking the proportion of the disposal consideration attributable to the fixture, multiplied by the lower of the original R&D expenditure on the asset or its disposal value
• The current owner is either the person who acquired the asset directly from the past owner or any subsequent person treated as owner of the plant or machinery