Capital Allowances Act 1990

51Application and interpretation of Chapter VI

(1)Subject to subsection (8) below, this Chapter shall apply to determine entitlement to an allowance under this Part in respect of expenditure on the provision of machinery or plant which is so installed or otherwise fixed in or to a building or any other description of land as to become, in law, part of that building or other land; and at any time when, by virtue of this Chapter, any machinery or plant is treated as belonging to any person, no other person shall be entitled to such an allowance in respect of it.

(2)In this Chapter—

• “equipment lessor”, “equipment lessee” and “equipment lease” have the meanings given by section 53;

• “fixture” means any such machinery or plant as is referred to in subsection (1) above;

• “interest in land” and “lease” shall be construed in accordance with subsection (3) below;

• “relevant land”, in relation to a fixture, means the building or other description of land of which the fixture becomes part.

(3)In this Chapter “interest in land” means—

(a)the fee simple estate in the land or an agreement to acquire that estate;

(b)in Scotland, the estate or interest of the proprietor of the dominium utile (or, in the case of property other than feudal property, of the owner) and any agreement to acquire such an estate or interest;

(c)any leasehold estate in, or in Scotland lease of, the land (whether in the nature of a head-lease, sub-lease or under-lease) and any agreement to acquire such an estate or, in Scotland, lease;

(d)an easement or servitude or any agreement to acquire an easement or servitude; and

(e)a licence to occupy land;

and, except in the context of leasing machinery or plant, any reference in the following provisions of this Chapter to a lease is a reference to such a leasehold estate or, in Scotland, lease as is mentioned in paragraph (c) above or to such an agreement as is mentioned in that paragraph (and, in relation to such an agreement, the expression “grant” shall be construed accordingly).

(4)If an interest in land is conveyed or assigned by way of security and subject to a right of redemption, then, so long as such a right subsists, the interest held by the creditor shall be treated for the purpose of this Chapter as held by the person having that right.

(5)Any reference in this Chapter to a person being entitled to an allowance in respect of any capital expenditure incurred on the provision of a fixture is a reference to a case where—

(a)that person is, for any chargeable period, entitled to a first-year allowance in respect of that expenditure; or

(b)that expenditure is taken into account in determining his qualifying expenditure for a chargeable period for the purposes of section 24(2), (3) and (5) (whether or not an allowance is made to him for that period),

and any reference to a chargeable period for which a person is so entitled is a reference—

(i)to the chargeable period referred to in paragraph (a) above; or

(ii)to the chargeable period referred to in paragraph (b) above; or

(iii)to any chargeable period which is subsequent to that referred to in paragraph (b) above but is not later than the chargeable period in which he is required to bring the disposal value of the fixture concerned into account for the purposes mentioned in paragraph (b) above.

(6)All such assessments and adjustments of assessments shall be made as may be necessary to give effect to the provisions of this Chapter.

(7)Where any question arises as to whether any machinery or plant has become, in law, part of a building or other land and that question is material with respect to the liability to tax (for whatever period) of two or more persons, that question shall be determined, for the purposes of the tax of all those persons, by the Special Commissioners who shall determine the question in like manner as if it were an appeal, except that, for the purposes of the determination, all those persons shall be entitled to appear and be heard by, or to make representations in writing to, the Special Commissioners.

(8)Subsection (1) above—

(a)shall not affect the entitlement of any person to an allowance by virtue of section 154;

(b)shall not apply in relation to expenditure—

(i)which consists of the payment of sums payable under a contract entered into before 12th July 1984; or

(ii)which is incurred pursuant to an obligation contained in a lease or agreement for a lease entered into before that date.