Capital Allowances Act 1990

158 Further provisions relating to sales without change of control or between connected persons

(1) Subject to subsections (3) and (5) below, where a sale is one to which paragraph (a) of subsection (1) of section 157 applies and paragraph (b) of that subsection does not apply, and the parties to the sale so elect by notice given to the inspector not later than two years after the sale, the following provisions shall have effect—

(a) section 157(4) shall have effect as if for each of the references to the price which the property would have fetched if sold in the open market there were substituted a reference to that price or to the sum mentioned in subsection (2) below, whichever is the lower, and

(b) notwithstanding section 157(4) or paragraph (a) above, such balancing charge, if any, shall be made on the buyer on any event occurring after the date of the sale as would have fallen to be made on the seller if the seller had continued to own the property and had done all such things and been allowed all such allowances or deductions in connection therewith as were done by or allowed to the buyer.

(2) The sum referred to in subsection (1)(a) above is—

(a) in the case of an industrial building or structure, the residue of the expenditure on the construction of that building or structure immediately before the sale, computed in accordance with section 8;

(b) in the case of a qualifying dwelling-house, the residue of the expenditure immediately before the sale, computed in accordance with section 90;

(c) in the case of assets representing qualifying expenditure, within the meaning of section 121, the excess of that expenditure attributable to those assets over the aggregate of—

(i) any allowances made under Part IV to the seller in respect of that expenditure before the sale; and

(ii) any disposal receipts which the seller has been required to bring into account by reference to that expenditure by reason of any event occurring before the sale.

(3) An election may not be made under this section—

(a) if—

(i) any of the parties to the sale is not resident in the United Kingdom at the time of sale, and

(ii) the circumstances are not at that time such that an allowance or charge under Part I, III, IV, VI or VII falls or might fall to be made to or on that party in consequence of the sale;

(b) if the buyer is a dual resident investing company;

(c) in the case of a qualifying dwelling-house, unless both the seller and the buyer at the time of the sale are or at any earlier time were approved bodies, as defined in section 56(4) of the [1980 c. 51.] Housing Act 1980.

(4) All such assessments and adjustments of assessments shall be made as may be necessary to give effect to this section.

(5) This section shall not apply in relation to any sale which is material for the purposes of Part V.

(6) In relation to sales which occurred before 29th July 1988, this section shall have effect with the omission of subsection (4) and the words in subsection (1) “not later than two years after the sale”.