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Capital Allowances Act 2001

Section 222: Disposal value restricted

808.This section is based on mainly on sections 76A(5), (6) and (10) of CAA 1990. It restricts the seller’s disposal value if a sale and finance leaseback is involved.

809.Subsection (2) lists directly the different values to be compared to arrive at the disposal value. This is based on some particularly complex parts of CAA 1990 which require cross-references and comparisons between sections.

810.Subsection (3) gives the rules for determining the “notional written-down value” – one of the values listed in subsection (2). In CAA 1990 this is defined by means of a notional trade. Removing that abstraction does not change the results from the calculation. See Note 24 in Annex 2.

811.Subsection (4) disapplies this section in sale and finance leasebacks if more than half the risk to the lessor has been removed. In those cases the restrictions are greater: see section 225.

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