Capital Allowances Act 2001 (c. 2)

Part 3 Industrial buildings allowances

Chapter 7 Balancing adjustments

Balancing allowances restricted where sale subject to subordinate interest

326 Interpretation of section 325

(1) In section 325—

• “commercial rent” means such rent as may reasonably be expected to have been required in respect of the subordinate interest (having regard to any premium payable for the grant of the interest) if the transaction had been at arm’s length;

• “premium” includes any capital consideration, except so much of any sum as corresponds to an amount of rent or profits falling to be calculated by reference to that sum under section 34 of ICTA;

• “subordinate interest” means an interest in or right over the building, whether granted by the former owner or anyone else.

(2) In section 325 and this section—

• “capital consideration” means consideration which consists of a capital sum or would be a capital sum if it had consisted of a money payment, and

• “rent” includes any consideration which is not capital consideration.