Capital Allowances Act 2001 section 79

Cases where Chapter 17 (anti-avoidance) applies

Section 79 adjusts the disposal and acquisition values used for capital allowances purposes when a car with private use is disposed of through a transaction caught by the anti-avoidance rules.

• This section applies where a disposal value must be brought into account for a car subject to the private use restriction, and the disposal is a sale or contract performance caught by the anti-avoidance provisions.
• The disposal value is the lower of the car's market value at the time of disposal and the original capital expenditure incurred (or treated as incurred) on providing the car by the person disposing of it.
• The person acquiring the car is treated as having incurred capital expenditure equal to the disposal value determined under this section.
• The effect is to prevent manipulation of disposal and acquisition values through avoidance transactions involving cars with an element of private use.