Capital Allowances Act 2001 section 268

Successions by beneficiaries

Section 268 deals with how plant and machinery allowances are handled when a beneficiary inherits a qualifying activity from a deceased person.

• A beneficiary who inherits a qualifying activity under a will or intestacy can elect for special capital allowances treatment on plant and machinery passing with that activity.
• The inherited plant or machinery is treated as sold to the beneficiary at the lower of its market value or the unrelieved qualifying expenditure remaining in the capital allowances pool.
• The plant or machinery must have been owned by the deceased, must pass to the beneficiary with the activity, and must be used or available for use in that activity.
• If the beneficiary later disposes of the inherited plant or machinery, the disposal value caps are calculated by reference to the deceased's original expenditure rather than the beneficiary's deemed acquisition cost.