Capital Allowances Act 2001 section 33B

Meaning of "replacement" in section 33A

Section 33B defines when expenditure on an integral feature is treated as a "replacement" for the purposes of the special rules in section 33A governing integral features.

• Expenditure on an integral feature that exceeds 50% of the full replacement cost is automatically treated as a replacement for capital allowances purposes.
• If initial expenditure is 50% or less of the replacement cost, but further expenditure on the same feature within 12 months brings the total above 50%, all that expenditure is treated as replacement expenditure.
• The 50% threshold is measured against the cost of replacing the integral feature at the time the initial expenditure is incurred.
• Where the 12-month aggregation rule applies retrospectively, HMRC may make all necessary assessments and adjustments to give effect to the replacement treatment.