Capital Allowances Act 2001 section 422

Use of asset otherwise than for permitted development etc

Section 422 requires a disposal value to be brought into account when a mineral asset begins to be used for development that is neither existing permitted development nor development for the person's own mineral extraction trade.

• Where a mineral asset starts being used for non-permitted development after acquisition, the owner must bring a disposal value into account — even without an actual disposal or permanent cessation of use in the mineral extraction trade.
• The disposal value must be recognised in the chargeable period in which the new use begins, regardless of whether the asset is used by the owner or by another person.
• Development counts as existing permitted development if, at the time of acquisition, it had already been lawfully carried out or begun, or could have been carried out under a general development order.
• For land outside the United Kingdom, lawfulness of past development is judged under local law, but the general development order test is applied as though the land were situated in England.