The following Tax practice note Produced in partnership with Martin Wilson provides comprehensive and up to date legal information covering:
The Capital Allowances Act 2001 contains provisions to ensure that one person cannot obtain capital allowances on expenditure which is actually borne or ‘met’ by another (the contributor). The contributor may obtain capital allowances if the contribution was made for the purposes of a trade or some other types of activity carried on by the contributor, or by a tenant of a building in which the contributor has an interest.
This Practice Note looks at the effect of contributions on capital allowances for plant and machinery, covering both the restrictions on allowances for recipients of contributions, and the allowances that are available to contributors.
Although outside the scope of this Practice Note, there are broadly similar rules for structures and buildings allowances (SBAs). Under these rules, a taxpayer may claim SBAs if a financial contribution is made to another person in respect of SBA qualifying assets for the purposes of the taxpayer’s business, or for the business carried on by the tenant of land in which the taxpayer has an interest. The recipient must deduct any contributions received from the amount they would otherwise claim. For information on SBAs, see Practice Note: Structures and buildings allowances.
Expenditure is not regarded as incurred by, and therefore capital allowances are not available to, any person to the extent that the expenditure is met (directly or indirectly) by
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