Capital Allowances Act 2001

[F1CHAPTER 5U.K.CALCULATING THE ALLOWANCE: SUPPLEMENTARY PROVISION

270EAProportionate adjustment in certain casesU.K.

(1)This section applies if a person is entitled to an allowance under section 270AA(2) for a chargeable period.

(2)If the chargeable period is more or less than one year, the allowance is proportionately increased or reduced.

(3)If—

(a)the conditions in section 270AA(2)(a) and [F2(b)(i)] are met on some, but not all, days during the chargeable period,

[F3(aa)the period mentioned in section 270AA(2)(b)(ii) expires part way through the chargeable period,] or

(b)entitlement to the allowance ceases under section 270AA(4) on any day during the chargeable period,

the allowance is proportionately reduced.

270EBMultiple usesU.K.

(1)This section applies if—

(a)a person is entitled to an allowance under section 270AA(2) by reference to a building or structure for a chargeable period, and

(b)the building or structure is put to multiple uses.

(2)The allowance, in relation to a qualifying activity, for a chargeable period of one year is [F43%] of the appropriate proportion of the qualifying expenditure.

(3)A building or structure is “put to multiple uses” if—

(a)the building or structure is used for the purposes of two or more qualifying activities,

(b)part of the building or structure is in use for the purposes of a qualifying activity and part of the building or structure is in use for the purposes of another activity, or

(c)part of the building or structure, which is not an area within a dwelling-house, is used both for the purposes of a qualifying activity and for the purposes of another activity.

(4)For the purposes of subsection (2), the “appropriate proportion” of the qualifying expenditure is the amount of that expenditure that would be apportioned to the qualifying activity if that expenditure were apportioned, on a just and reasonable basis, between all the activities for which the building or structure is used, having regard (in particular) to the extent to which the building or structure is used for each activity in the chargeable period.

270ECResearch and developmentU.K.

(1)This section applies if a person (the “seller”) sells the relevant interest in a building or structure, in respect of which qualifying expenditure has been incurred, to another person (the “purchaser”).

(2)Subsection (3) applies if the purchaser is entitled to an allowance in respect of qualifying expenditure incurred on the acquisition of the building or structure under Part 6 (research and development allowances).

(3)The total amount of the allowance available to the purchaser under this Part by reference to the building or structure is limited to—

(a)the amount of qualifying expenditure (within the meaning of section 270BA) incurred on the construction or acquisition of the building or structure, less

(b)the total of—

(i)the amount of the allowance under this Part to which an entitlement arose by reference to the building or structure before its sale (or would have arisen if the building or structure had been in continuous qualifying use since it was first brought into non-residential use), and

(ii)the amount of the allowance under Part 6 to which the purchaser is entitled in respect of qualifying expenditure incurred on the acquisition of the building or structure.

(and section 270AA(2)(b)(ii) is subject to this subsection).

(4)Subsection (5) applies if—

(a)the seller was entitled to an allowance in respect of qualifying expenditure incurred by the seller on the acquisition of the building or structure under Part 6 (research and development allowances), and

(b)the purchaser is not entitled to an allowance under that Part in respect of the qualifying expenditure incurred by the purchaser on the acquisition of the building or structure.

(5)The total amount of the allowance available to the purchaser is limited to the lower of—

(a)the amount which is equal to—

(i)the amount of qualifying expenditure (within the meaning of section 270BA) incurred on the construction or acquisition of the building or structure, less

(ii)the amount of the allowance under this Part to which an entitlement arose by reference to the building or structure before its sale (or would have arisen if the building or structure had been in continuous qualifying use since it was first brought into non-residential use), and

(b)the capital sum paid by the purchaser for the relevant interest.

(and section 270AA(2)(b)(ii) is subject to this subsection).

(6)Section 7 (no double allowances) is to be ignored for the purposes of determining the amounts referred to in subsections (3)(b)(i) and (ii) and (5)(a)(i) and (ii).]