B3.390 Plant and machinery allowances—successions
If a person succeeds to any qualifying activity (see B1.606) other than an office or employment1, which until that time was carried on by another person and, where the qualifying activity is a trade or property business, the change involved all of the persons carrying on that activity before the change permanently ceasing to carry it on2, then any plant or machinery which was owned by the predecessor and either in use or provided and available for use for the purposes of the discontinued activity immediately before the succession took place and which, without being sold, is either in use or provided and available for use for the purposes of the new qualifying activity immediately after the succession takes place, is treated as if it had been sold to the successor when the succession took place at market value3. This provision also applies to any notional discontinuance which takes place for corporation tax purposes4.
Although the successor may be entitled to writing-down allowances, no annual investment allowance or first-year allowance is available5.
In Inmarsat Global Ltd6, the Upper Tribunal held that these provisions are primarily concerned with the tax position of the predecessor and have no application to a successor unless it becomes the actual owner of the asset in question. Inmarsat was the successor to the business of IMSO, an international organisation established by a Convention to operate satellites for maritime communications. Six satellites were leased to IMSO by financial lessors and IMSO