Capital Allowances Act 2001 section 536

Contributions not made by public bodies and not eligible for tax relief

Section 536 provides an exception to the general rule that expenditure met by someone else's contribution is excluded from capital allowances, where the contributor is not a public body and gets no tax benefit from making the contribution.

• Where a private (non-public body) contributor pays for someone else's capital expenditure, the recipient can still claim capital allowances provided the contributor receives no tax relief for the payment
• Two conditions must both be met: the contributor must not be a public body, and the contributor must be unable to claim either a capital allowance or a trading deduction for the contribution
• When testing whether the contributor could claim a capital allowance, you assume the contributor is within the charge to tax, even if they are not
• This exception does not apply to structures and buildings allowances under Part 2A — contributions towards those assets remain excluded under the general rule