»Ê¹ÚÌåÓýapp

CAA01/S227 - S228

»Ê¹ÚÌåÓýapp restriction on the buyer’s qualifying expenditure in a sale and leaseback case CA28300 is eased if the buyer and seller elect for CAA01/S228 to apply.

»Ê¹ÚÌåÓýapp election must be made by notice to HMRC no later than 2 years after the date of the sale and leaseback. If an election is made it is irrevocable.

»Ê¹ÚÌåÓýappse are the conditions that must be satisfied for an election to be possible:

• »Ê¹ÚÌåÓýapp seller incurred capital expenditure on the asset.
• »Ê¹ÚÌåÓýapp asset was new when the seller acquired it.
• »Ê¹ÚÌåÓýapp asset was not acquired by the seller in a connected persons transaction, a sale and leaseback transaction or a transaction to obtain a tax advantage (CA28300).
• »Ê¹ÚÌåÓýapp sale takes place not more than 4 months after any person first brings the asset into use for any purpose.
• »Ê¹ÚÌåÓýapp seller has not claimed capital allowances on the asset or pooled the expenditure for the purpose of claiming allowances.

Where an election is made the buyer’s qualifying expenditure is the smallest of:

• the buyer’s actual expenditure,
• capital expenditure incurred by the seller on the asset,
• capital expenditure incurred by anyone connected with the seller on the asset.