Capital Allowances Act 2001 section 212J

Relevant excess of allowances

Section 212J explains how to determine whether a company (C) or person (P) has a relevant excess of allowances in relation to a relevant activity, which is a key trigger for the anti-avoidance rules on allowance buying.

• A relevant excess of allowances exists when the relevant tax written-down value (RTWDV) of the plant and machinery used in the activity exceeds the balance sheet value (BSV)
• RTWDV is defined in section 212K and BSV is defined in section 212L
• Plant and machinery subject to long funding leases (where expenditure is not qualifying expenditure under section 34A) is excluded from these calculations
• Plant and machinery treated as owned by someone other than C or P under hire-purchase or similar arrangements (section 67) is also excluded