Capital Allowances Act 2001 section 198

Election to apportion sale price on sale of qualifying interest

Section 198 allows the seller and purchaser of a property containing fixtures to jointly elect a value to be attributed to those fixtures for capital allowances purposes when a qualifying interest is sold.

• When a property containing fixtures is sold (at not less than market value), the seller and purchaser may jointly elect to fix the portion of the sale price treated as relating to the fixtures
• The elected amount cannot exceed the lower of the seller's original qualifying expenditure on the fixture or the actual sale price
• Any part of the sale price not attributed to the fixture is treated as expenditure on the non-fixture property; if the entire sale price is attributed to the fixture, expenditure on the remaining property is treated as nil
• The election is subject to overriding restrictions where prior industrial buildings, business premises renovation, or research and development allowances have been claimed, and to anti-avoidance rules and procedural requirements