Capital Allowances Act 2001 Schedule 3 paragraph 12

Use for qualifying activity of plant or machinery which is a gift

Schedule 3 paragraph 12 modifies the rules in section 14 regarding gifted plant or machinery, imposing an additional condition where the equipment was brought into use before 27th July 1989.

• Section 14 normally allows a person who receives plant or machinery as a gift to claim capital allowances when they use it for a qualifying activity.
• For plant or machinery first brought into use before 27th July 1989, an extra condition is inserted into section 14 as a new subsection (1A).
• The extra condition requires that the donor must have been obliged under the old legislation (section 24(6) of CAA 1990) to bring a disposal value into account equal to the open market price of the asset at the time of the gift.
• If that condition is not met — that is, the donor was not required to account for an open market disposal value — then section 14 does not apply, and the recipient cannot claim allowances under that provision.