Capital Allowances Act 2001 section 267

Effect of election

Section 267 sets out the consequences when connected persons elect for tax-neutral treatment of plant and machinery on the succession to a qualifying activity.

• Where an election is made, relevant plant and machinery is treated as sold from predecessor to successor at a price that triggers neither a balancing allowance nor a balancing charge.
• Relevant plant or machinery is that which was owned and in use (or available for use) by the predecessor immediately before the succession and is owned and in use (or available for use) by the successor immediately after.
• The successor steps into the predecessor's shoes — all allowances and charges are calculated as though everything done to or by the predecessor had been done to or by the successor.
• Any necessary assessments and adjustments must be made to give effect to the election, subject to any restrictions imposed by section 267A.