Capital Allowances Act 2001 section 51K

Operation of annual investment allowance where restrictions apply

Section 51K explains how the annual investment allowance (AIA) works in practice when related businesses or persons are required to share a single AIA between them.

• Where restrictions apply (for example, because businesses are in the same group or under common control), the related persons must share a single AIA between them
• If total qualifying expenditure is within the maximum allowance, the full amount can be claimed; if it exceeds the maximum, only expenditure up to the maximum allowance qualifies
• The persons sharing the allowance can choose how much of their entitled expenditure to claim — they do not have to claim the full amount
• No individual person within the sharing arrangement can allocate more AIA to a chargeable period than they would have been entitled to had they not been subject to the sharing restriction