Capital Allowances Act 2001 section 223

No first-year allowance for B's expenditure

Section 223 prevents the buyer (B) in a sale and finance leaseback arrangement from claiming any first-year allowance on their expenditure, and provides for the withdrawal of any such allowance that has been incorrectly given.

• In a sale and finance leaseback transaction, the buyer (B) is not entitled to claim any first-year allowance on the expenditure incurred in acquiring the plant or machinery.
• This restriction applies specifically to the buyer's qualifying expenditure in arrangements that fall within the sale and finance leaseback provisions.
• If a first-year allowance has been incorrectly made to the buyer in such a transaction, that allowance must be withdrawn.
• This rule mirrors the equivalent restriction in section 217 that applies to sale and leaseback arrangements more generally, denying both annual investment allowance and first-year allowance to the buyer.