Capital Allowances Act 2001 section 51M

Special provision for long chargeable periods

Section 51M provides for an additional annual investment allowance (AIA) where a business has a chargeable period longer than one year and shares common control with other qualifying activities.

• Where two or more qualifying activities are under common control and one has a chargeable period exceeding twelve months, an additional AIA may be claimed for that longer-period activity
• The additional allowance is based on any unused AIA from earlier tax years that fall within the long chargeable period, calculated as the maximum allowance for each year minus allowances already claimed by related activities in that year
• The additional amount is capped by a time-apportionment formula: the proportion of days the long chargeable period occupies in each earlier tax year, multiplied by that year's maximum AIA, and is reduced by any amount previously allocated under this provision
• The normal rules for allocating AIA among commonly controlled activities continue to apply alongside this additional allowance

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