Capital Allowances Act 2001 section 262AD

Co-ownership schemes: effect of election for participants

Section 262AD deals with the capital allowances consequences for individual participants in a co-ownership authorised contractual scheme when the scheme operator makes an election to be treated as the person carrying on the qualifying activity.

• When the election takes effect, each participant is treated as ceasing to own their interest in the scheme's property at the start of the first accounting period covered by the election
• The disposal value brought into account for this deemed cessation is the tax written-down value — the amount that produces neither a balancing allowance nor a balancing charge
• For the purpose of calculating the tax written-down value, the relevant expenditure is assumed to be in its own separate capital allowances pool
• All participants' profits or gains from the qualifying activity are assumed to be chargeable to tax, even if in practice there are none