Capital Allowances Act 2001 section 304

Application of section 303 where developer involved

Section 304 modifies the calculation of qualifying enterprise zone expenditure under section 303 where the building was constructed by a developer who then sold the relevant interest as part of their development trade.

• This section applies where section 303 conditions are met but the building was constructed by a developer who sold the relevant interest in the course of their development trade
• Where the developer's sale is the relevant sale, the qualifying enterprise zone expenditure (Z) and non-qualifying expenditure (N) are calculated using the purchaser's capital sum and the lower of that sum or the original construction cost, apportioned by the enterprise zone time-limit fraction (E divided by T)
• Where the developer's sale is not the relevant sale, Z and N are calculated using the lower of the price the developer received and the capital sum paid on the relevant sale, again apportioned by the enterprise zone time-limit fraction
• The variables Z, N, E and T carry the same meanings as in section 303, with Z representing qualifying enterprise zone expenditure and N representing the portion that does not qualify