Capital Allowances Act 2001 section 51A

Entitlement to annual investment allowance

Section 51A sets out who is entitled to claim an annual investment allowance (AIA) on qualifying expenditure on plant and machinery, and the maximum amount that can be claimed.

• A person qualifies for the AIA if they incur AIA qualifying expenditure in a chargeable period and own the plant or machinery at some point during that period.
• The maximum AIA is £1,000,000 per chargeable period, with the limit adjusted proportionately if the period is longer or shorter than a year.
• Where qualifying expenditure is at or below the maximum, the full amount qualifies for the allowance; any excess above the limit does not attract AIA relief.
• The entitlement is subject to a number of restrictions and anti-avoidance rules, and the Treasury has the power to increase the £1,000,000 limit by statutory order.