Commentary

B3.357 Plant and machinery allowances on fixtures—cessation of ownership and disposal values

Business tax
Business tax | Commentary

B3.357 Plant and machinery allowances on fixtures—cessation of ownership and disposal values

Business tax | Commentary

B3.357 Plant and machinery allowances on fixtures—cessation of ownership and disposal values

Cessation of ownership of fixtures

Under the general provisions of CAA 2001, s 61 (see B3.334), a disposal value has to be brought into account in a computation of capital allowances when plant or machinery ceases to be owned by a person1. The circumstances in which a fixture is treated as being owned by a person are described in B3.356; this article describes the circumstances in which a fixture ceases to be owned by such a person2. A disposal value also has to be brought into account if any of the provisions for disposal events in CAA 2001, s 61 apply, not just in the case of the disposal events outlined in the fixtures provisions3.

A fixture ceases to be owned by a person at the time when he ceases to have the qualifying interest4. Where a person is treated as the owner of the fixture by virtue of his interest in the relevant land5, the qualifying interest is the interest in the relevant land6. Where an incoming lessee is treated as the owner of the fixture because he has given consideration for the lease which includes a sum for the fixture7, the qualifying interest is the lease8.

There are five occasions where, although the original qualifying interest may cease, it is nevertheless deemed to continue9. These are where:

  1.  

    (a)     the qualifying interest is subsumed or merged in another interest acquired by the same person

  2.  

    (b)     the qualifying interest is

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