Capital Allowances Act 2001 section 296

Purchase of building which has been sold unused by developer

Section 296 deals with how qualifying expenditure is determined when a developer sells a building before it has ever been used, and the building may have been sold more than once before first use.

• The section applies where a developer constructs a building and sells the relevant interest before the building is first used, as part of their development trade.
• If the developer's sale is the only sale before first use, the capital sum paid by the purchaser is the full amount of qualifying expenditure.
• If the building has been sold more than once before first use, the qualifying expenditure on the last sale is the lower of the final purchase price and the price paid on the developer's original sale.
• The qualifying expenditure is treated as incurred by the purchaser at the point when the relevant capital sum became payable.