Capital Allowances Act 2001 section 270EC

Research and development

Section 270EC restricts the structures and buildings allowances available to a buyer when the seller (or a previous seller) was also entitled to research and development allowances (Part 6 allowances) in respect of the same building or structure.

• When someone buys a building or structure, their total structures and buildings allowances are reduced by the amount of any Part 6 (research and development) allowance the buyer is entitled to for that same building or structure.
• A further cap applies if the current or any earlier sale was by a person entitled to a Part 6 allowance, and the sale price was below the "ordinary Part 2A amount" — broadly, the original qualifying expenditure minus allowances already given.
• Where that further cap applies, the buyer's total allowances cannot exceed the "permitted maximum", which is the lowest price paid on any of the relevant sales, minus the total structures and buildings allowances that have arisen since the earliest of those sales.
• References to allowances include those that would have arisen had the building or structure been in continuous qualifying (non-residential) use from the date it was first brought into such use.