Capital Allowances Act 2001 section 76

Limit where part of expenditure met by another person

Section 76 limits the writing-down allowance on an expensive car when part of the cost has been met by another person, ensuring the £3,000 annual cap is shared proportionately between the parties involved.

• Where a contribution from another person reduces the expenditure treated as incurred by the car's owner, the owner's annual writing-down allowance cap is reduced proportionately from £3,000 based on the ratio of their net expenditure to the total cost.
• Where someone makes a capital contribution towards a car costing more than £12,000 and claims writing-down allowances as a contributor, their annual allowance is capped at £3,000 multiplied by the ratio of their contribution to the total cost.
• In both cases, the effect is that the overall £3,000 annual cap on expensive car allowances is shared between the parties in proportion to their respective shares of the expenditure.
• The relevant cap is proportionately increased or reduced if the chargeable period is longer or shorter than a year.