Capital Allowances Act 2001 section 189

Identifying the qualifying interest in special cases

Section 189 ensures that a person does not lose their entitlement to capital allowances on fixtures simply because their original qualifying interest in the land changes form, provided they continue to hold an equivalent interest in the same land.

• Where an agreement to acquire a land interest is followed by the actual transfer or grant of that interest, the new interest becomes the qualifying interest automatically.
• Where a qualifying interest is merged into a higher interest acquired by the same person (for example, a leaseholder buying the freehold), the higher interest takes over as the qualifying interest.
• Where a lease or licence that is the qualifying interest terminates but a new lease or licence over the same land is granted to the same tenant or licensee, the replacement lease or licence becomes the qualifying interest.
• Where a lease terminates but the tenant remains in possession of the land with the landlord's consent and no new lease is granted, the original qualifying interest is treated as continuing for as long as the tenant stays in occupation.