Capital Allowances Act 2001 section 214

Connected persons

Section 214 restricts plant and machinery allowances where a relevant transaction takes place between two parties who are connected with each other.

• When a buyer (B) enters into a relevant transaction with a seller (S), and the two parties are connected persons, allowances under Part 2 of the Capital Allowances Act are restricted.
• The restrictions that apply are found in sections 217 and 218 (or section 218ZA(3) where relevant), which limit the allowances the buyer can claim.
• "Connected persons" is a defined term (set out in section 232 of the Act) and broadly covers relationships such as related companies, business partners, and close family members.
• Connected person transactions are one of three types of relevant transaction that trigger allowance restrictions — the other two being transactions entered into to obtain allowances and sale and leaseback arrangements.