Capital Allowances Act 2001 section 208A

Cars: disposal value in avoidance cases

Section 208A sets out special rules for determining the disposal value of a car held in a single asset pool when the transaction triggers anti-avoidance restrictions on the buyer's capital allowances.

• This section applies when a car held in a single asset pool is sold or otherwise disposed of under a contract, and the buyer's allowances on that transaction are restricted by anti-avoidance provisions
• The disposal value brought into account is the lower of the car's market value at the time of disposal and the original capital expenditure incurred (or treated as incurred) on providing the car by the person disposing of it
• The person acquiring the car is treated as having incurred capital expenditure equal to that disposal value, which becomes the starting point for their own capital allowances calculations
• A "car" for these purposes has the same meaning as defined elsewhere in the Act, and a "section 206 car" is one whose expenditure must be allocated to its own single asset pool