Capital Allowances Act 2001 section 366

Interest conveyed or assigned by way of security

Section 366 deals with who is treated as holding the relevant interest in land when that interest has been used as security for a loan, such as a mortgage.

• When an interest in land is conveyed or assigned as security for a debt (e.g. a mortgage), the borrower retains the relevant interest for capital allowance purposes, not the lender.
• This applies where the borrower has a right of redemption — that is, the right to recover the interest once the debt is repaid.
• The lender (creditor) is not treated as holding the relevant interest, even though the interest may have been formally conveyed or assigned to them.
• This provision is particularly relevant in Northern Ireland, where mortgage arrangements may involve a formal conveyance or assignment of the land interest.