Corporation Tax Act 2009 section 255

Transfer of interest in premises

Section 255 deals with what happens to the sea walls expenditure deduction when the person who incurred the expenditure transfers their interest in the premises during the 21-year deduction period.

• When a property interest is transferred during the deduction period, both transferor and transferee share the sea walls deduction for the year of transfer on a just and reasonable basis.
• If the entire premises are transferred, the transferee alone receives the deduction for all subsequent years within the deduction period.
• If only part of the premises is transferred, both parties continue to receive a share of the deduction in subsequent years, based on what is properly referable to their respective parts.
• The rules apply to all transfers, including those arising by operation of law such as successions to estates, as well as conventional sales or mergers of interests.