Capital Allowances Act 1990

114 Assets previously acquired

(1) In this section “the buyer’s expenditure” means the capital expenditure incurred by him as mentioned in section 113(1), less any amount of that expenditure which, by virtue of section 110, does not constitute qualifying expenditure.

(2) If the previous trader did not become entitled to an allowance or liable to a balancing charge in respect of his qualifying expenditure, so much of the buyer’s expenditure as does not exceed the amount of the previous trader’s qualifying expenditure shall be the buyer’s qualifying expenditure in respect of the acquisition of the purchased asset.

(3) If the previous trader became entitled to an allowance or liable to a balancing charge in respect of his qualifying expenditure, so much of the buyer’s expenditure as does not exceed the residue of the previous trader’s qualifying expenditure shall be the buyer’s qualifying expenditure in respect of the acquisition of the purchased asset.

(4) In relation to the previous trader’s qualifying expenditure, the residue referred to in subsection (3) above is that expenditure—

(a) less the total of all allowances made to him in respect of that expenditure; and

(b) plus the amount (if any) on which a balancing charge was made in respect of that expenditure.

(5) For the purposes of subsection (4) above, where the previous trader’s qualifying expenditure is an amount attributed to the purchased asset on a just and reasonable basis in accordance with section 113(6), any allowances and any balancing charge made by reference to a greater amount of expenditure shall be apportioned on the like basis.

(6) In this section—

• “allowance” means an allowance under section 98;

• “balancing charge” means a balancing charge under section 100; and

• “the buyer”, “the previous trader” and “the purchased asset” have the same meanings as in section 113.