Capital Allowances Act 2001 section 542

Transfer of C's trade

Section 542 deals with what happens to contribution allowances when the person who made the capital contribution (referred to as "C") transfers their trade, either in whole or in part, to someone else.

• The section applies where C originally made a capital contribution for the purposes of their own trade and that trade (or part of it) is later transferred to another person
• Where the entire trade is transferred, any remaining writing-down allowances for periods after the transfer date pass to the new owner (the transferee) instead of C (the transferor)
• Where only part of the trade is transferred, writing-down allowances pass to the transferee only to the extent they are properly attributable to the part of the trade that was transferred
• C (the transferor) retains any writing-down allowances that relate to the portion of the trade they continue to carry on