Capital Allowances Act 2001 section 194

Acquisition of ownership by assignee of equipment lessor

Section 194 deals with what happens when an equipment lessor assigns their rights under an equipment lease, and how the assignee is treated for capital allowances purposes.

• When an equipment lessor assigns their lease rights, the assignee is treated as the new owner of the fixture from the date of assignment
• The assignee's capital expenditure on the fixture is the consideration they paid for the assignment
• The assignee steps into the shoes of the original equipment lessor and is themselves treated as an equipment lessor going forward
• This treatment ensures the assignee can claim plant and machinery allowances and is subject to the same fixture rules as the original lessor