Capital Allowances Act 2001 section 51C

Second restriction: groups of companies

Section 51C restricts the annual investment allowance (AIA) so that a parent company and its subsidiaries share a single AIA between them, rather than each company claiming its own separate allowance.

• A parent undertaking and all its subsidiary companies are entitled to only one AIA between them for qualifying expenditure incurred in chargeable periods ending in the same financial year.
• The group companies may allocate the single shared AIA across their qualifying expenditure in whatever way they choose.
• A company is treated as a parent undertaking of another company if it holds that status at the end of the subsidiary's chargeable period ending in the relevant financial year, using the definition of "parent undertaking" in section 1162 of the Companies Act 2006.
• This group restriction is itself subject to a further restriction under section 51D, which deals with groups of companies under common control.