Capital Allowances Act 2001 section 262AE

Co-ownership schemes: effect of election for purchasers

Section 262AE sets out how a purchaser's qualifying expenditure on a fixture is determined when that fixture has left a co-ownership authorised contractual scheme for which an operator's election is in effect.

• Where the operator's disposal value statement requirement is not met, the new owner's qualifying expenditure on the fixture is treated as nil — meaning no capital allowances can be claimed at all.
• Where the requirement is met, the new owner's qualifying expenditure is capped at the assumed disposal value that the operator used in the scheme's own capital allowances calculation — any excess is disregarded.
• The disposal value statement requirement is satisfied only if the operator provides a written statement of the assumed disposal value within two years of the fixture leaving the scheme, and the new owner obtains that statement (or a copy) from the operator.
• The usual fixture restriction rules in sections 185 and 187A (which normally limit allowances when fixtures change hands) are switched off and replaced by the rules in this section.