Part 2

Plant and machinery allowances
Chapter 14

Fixtures

Restrictions on amount of qualifying expenditure

Fixture on which an industrial buildings allowance has been made
186
1
This section applies if—
a
a person (“the past owner”) has at any time claimed an allowance to which he was entitled under Part 3 (industrial buildings allowances) in respect of expenditure which was or included expenditure on the provision of plant or machinery,
b
the past owner has transferred the interest which was the relevant interest for the purposes of Part 3, and
c
the current owner of the plant or machinery makes a claim in respect of expenditure (“new expenditure”) incurred—
i
on the provision of the plant or machinery, and
ii
at a time when it is a fixture in the building.
2
If the new expenditure exceeds the maximum allowable amount, the excess is to be left out of account in determining the current owner’s qualifying expenditure.
3
If the total consideration for the transfer by the past owner exceeds R, the maximum allowable amount is—
F/T xR
where—
- F is the part of the consideration for the transfer by the past owner that is attributable to the fixture,
- T is the total consideration for that transfer, and
- R is the residue of qualifying expenditure which would have been attributable to the relevant interest immediately after that transfer, calculated on the assumption that the transfer was a sale of the relevant interest, had the time immediately after the transfer fallen immediately before the repeal of Part 3 by section 84 of FA 2008.
3A
Where subsection (3) does not apply, the maximum allowable amount is the part of the consideration for the transfer by the past owner that is attributable to the fixture.
4
For the purposes of this section the current owner of the plant or machinery is—
a
the person to whom the past owner transferred the relevant interest, or
b
any person who is subsequently treated as the owner of the plant or machinery.
5
In this section “building” and “residue of qualifying expenditure” have the same meaning as for the purposes of Part 3 immediately before its repeal by section 84 of FA 2008.
Pt. 2 modified (24.2.2003) by Proceeds of Crime Act 2002 (c. 29), s. 458(1), Sch. 10 para. 12 (with Sch. 10 para. 17(1)); S.I. 2003/120, art. 2, Sch. (with arts. 3 4) (as amended (20.2.2003) by S.I. 2003/333, art. 14)
S. 45H(2) modified (with effect in accordance with s. 167 of the amending Act) by Finance Act 2003 (c. 14) , Sch. 30 para. 7
Pt. 2 restricted (5.10.2004) by Energy Act 2004 (c. 20) , s. 198(2) , Sch. 4 para. 4 ; S.I. 2004/2575 , art. 2(1) , Sch. 1
Pt. 2 modified (5.10.2004) by Energy Act 2004 (c. 20) , s. 198(2) , Sch. 9 paras. 9(2), 21(2) (with s. 38(2)); S.I. 2004/2575, art. 2(1) , Sch. 1
Pt. 2 restricted (5.10.2004) by Energy Act 2004 (c. 20) , s. 198(2) , Sch. 9 paras. 10, 22 (with s. 38(2) ); S.I. 2004/2575 , art. 2(1) , Sch. 1
Word in s. 186(1)(a) substituted (with effect in accordance with Sch. 27 para. 30(2) of the amending Act) by Finance Act 2008 (c. 9), Sch. 27 para. 5(2)
Word in s. 186(1)(b) substituted (with effect in accordance with Sch. 27 para. 30(2) of the amending Act) by Finance Act 2008 (c. 9), Sch. 27 para. 5(2)
Words in s. 186(3) inserted (with effect in accordance with Sch. 27 para. 30(2) of the amending Act) by Finance Act 2008 (c. 9), Sch. 27 para. 5(3)(a)
Words in s. 186(3) inserted (with effect in accordance with Sch. 27 para. 30(2) of the amending Act) by Finance Act 2008 (c. 9), Sch. 27 para. 5(3)(b)(i)
Words in s. 186(3) inserted (with effect in accordance with Sch. 27 para. 30(2) of the amending Act) by Finance Act 2008 (c. 9), Sch. 27 para. 5(3)(b)(ii)
Words in s. 186(5) substituted (with effect in accordance with Sch. 27 para. 30(2) of the amending Act) by Finance Act 2008 (c. 9), Sch. 27 para. 5(5)
S. 186(3A) inserted (with effect in accordance with Sch. 27 para. 30(2) of the amending Act) by Finance Act 2008 (c. 9), Sch. 27 para. 5(4)
Pt. 2 modified (22.7.2008) by Crossrail Act 2008 (c. 18), Sch. 13 para. 19
Pt. 2 modified (22.7.2008) by Crossrail Act 2008 (c. 18), Sch. 13 para. 35
Pt. 2 modified (22.7.2008) by Crossrail Act 2008 (c. 18), Sch. 13 paras. 36, 37
Pt. 2 modified (21.7.2009) by Finance Act 2009 (c. 10), s. 24
Word in s. 186(3) substituted (21.7.2009) by Finance Act 2009 (c. 10), s. 126(5)(a)
Word in s. 186(5) substituted (21.7.2009) by Finance Act 2009 (c. 10), s. 126(5)(a)
Pt. 2 modified (17.7.2013) by Finance Act 2013 (c. 29), s. 73(7)-(11) (with s. 73(6))
Pt. 2 modified (10.6.2021) by Finance Act 2021 (c. 26), s. 9(1)(a)