Who must make the election under section 382 when agricultural land is acquired by a new owner?

When a balancing event arises from the acquisition of the relevant interest in agricultural land, the election must be made jointly by the former owner and the new owner. Neither party can make the election unilaterally. Additionally, no election is permitted if any party required to join is not within the charge to UK income tax or corporation tax.

What anti-avoidance restriction applies to elections under CAA 2001 section 382?

No election may be made if the sole or main benefit expected from the acquisition, or from any wider series of transactions of which it forms part, is obtaining an allowance or a greater allowance under the agricultural buildings allowances regime. Rules treating sales at market value are disregarded when assessing the expected benefit.

What are the time limits for making an election under section 382 of the Capital Allowances Act 2001?

For income tax purposes, notice must be given to HMRC by the normal deadline for amending the tax return for the tax year in which the relevant chargeable period ends. For corporation tax purposes, notice must be given no later than two years after the end of the chargeable period in which the balancing event occurred.

Who makes the election when a balancing event involves demolition, destruction, or cessation of use rather than acquisition?

Where the balancing event does not involve an acquisition but instead involves demolition, destruction, or the building ceasing to be used, the election must be made by the person who was entitled to the relevant interest in the agricultural land immediately before the event occurred, rather than jointly by two parties.

Capital Allowances Act 2001 section 382

Requirements as to elections

Section 382 sets out the rules and conditions that must be met when making an election to treat certain events as balancing events for agricultural buildings allowances purposes.

Where the relevant interest in agricultural land is acquired by a new owner, both the former and new owner must make the election jointly, and the election is prohibited if the main benefit of the transaction is obtaining a tax allowance.
Where the balancing event involves demolition, destruction, or cessation of use of the building (rather than a transfer of ownership), the election must be made by the person who held the relevant interest immediately before the event.
No election can be made if any person who is required to make it is not within the charge to tax.
The election must be notified to HMRC within the normal self-assessment time limit for income tax purposes, or within 2 years after the end of the relevant chargeable period for corporation tax purposes.

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