Capital Allowances Act 2001 section 263

Qualifying activities carried on in partnership

Section 263 deals with how plant and machinery capital allowances and balancing adjustments are handled when there is a change in the membership of a partnership carrying on a qualifying activity.

• The section applies where a qualifying activity is carried on in partnership and there has been a change in the partners, provided that at least one continuing partner (or, for corporation tax, a continuing company partner) remains after the change
• Annual investment allowances, first-year allowances and writing-down allowances are given to the current partners, calculated as though they had always carried on the activity and as though everything done by their predecessors had been done by them
• Balancing allowances and balancing charges arising from a particular event are made to or on the partners at the time of that event, again calculated as though those partners had always carried on the activity
• A qualifying activity for these purposes covers all activities listed in section 15(1) except an employment or office, and applies even if the profits from the activity are not chargeable to tax