Capital Allowances Act 2001 section 353

Lessors and licensors

Section 353 explains how capital allowances and balancing charges are given effect for persons who lease or license out an industrial building, by treating them as expenses or receipts of a property business.

• The section applies where a person is entitled to an allowance or liable to a charge, and their interest in the building is or was subject to a lease or licence at the relevant time.
• If the building is an asset of a UK or overseas property business, the allowance is treated as an expense and the charge as a receipt of that business.
• If the building is not an asset of any property business, the person is treated as if they were carrying on a UK property business, with the allowance or charge given effect as an expense or receipt of that notional business.
• The "relevant time" varies depending on the type of allowance: for initial allowances it is when expenditure was incurred or before the building is first used; for writing-down allowances it is the end of the chargeable period; and for balancing adjustments it is immediately before the triggering event.