Capital Allowances Act 2001 section 195B

Acquisition of ownership by client

Section 195B explains how a client acquires ownership of a fixture and the associated capital allowances treatment when they pay a capital sum to discharge their obligations under an energy services agreement.

• When a client pays a capital sum to discharge their obligations under an energy services agreement, they are treated as having incurred qualifying expenditure on the fixture equal to that capital sum.
• The client becomes the owner of the fixture from the time the capital sum is paid onwards.
• If the client's obligations have been assigned or transferred to another person (whether by assignment, operation of law, or otherwise), that other person steps into the client's shoes for the purposes of this treatment.
• This section works alongside section 192A, which deals with the cessation of ownership by the energy services provider when the client's obligations are discharged.