Capital Allowances Act 2001 section 327

Capital value provisions: application of provisions

Section 327 sets out when the anti-avoidance rules in sections 328 to 331 apply, which are designed to prevent abuse of enterprise zone building allowances by those who realise the capital value of such buildings.

• These provisions only apply to expenditure on constructing a building where the site was wholly or mainly located in an enterprise zone.
• The expenditure must have been incurred within 10 years of the site first being included in the enterprise zone.
• Alternatively, the provisions apply if the expenditure arose under a contract entered into within that same 10-year window.
• The rules were introduced to prevent manipulation of the generous capital allowances available for enterprise zone buildings.