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Capital Allowances Act 2001

Section 208: Effect of significant reduction in use for purposes of qualifying activity

759.This section is based on section 79A of CAA 1990 which was introduced by section 79(2) of FA 2000. It is an anti-avoidance rule. It provides for a special disposal event at market value if:

  • there is a significant reduction in the use for the purposes of the qualifying activity; and

  • the market value of the asset exceeds the available qualifying expenditure in the single asset pool by more than £1 million.

760.Subsection (1) sets out the conditions that have to apply and subsection (2) gives the effect. The disposal value in subsection (2) will be market value (from the Table in section 61).

761.Subsection (2) will mean that the single asset pool ends and a new one begins because of the general pooling rules for the final chargeable period in section 65.

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