Capital Allowances Act 2001 section 87

Short-life assets provided for leasing

Section 87 deals with what happens when a leased asset that was given short-life asset treatment is diverted from its intended qualifying purpose within the first 8 years.

• Applies to plant or machinery treated as a short-life asset on the basis it was provided for leasing but would be used for a qualifying purpose within the designated period
• Triggered when the asset begins to be used for a non-qualifying purpose within the first 8 years of the designated period, in a chargeable period ending on or before the relevant cut-off date
• The short-life asset pool closes immediately without a final chargeable period, and any remaining qualifying expenditure transfers to the main pool
• The asset permanently loses its short-life asset status from that point onwards