Intricacies of the 2014 fixtures rules

Key points

• There is still little awareness of the new fixtures rules legislation in capital allowances which have applied fully since 2014.
• A new owner’s ability to enjoy any tax relief arising from the capital allowances fixtures is dependent on the past owner’s position and actions.
• A CAA 2001 s 198 (or s 199) election allows the parties to a transaction to agree and fix the portion of the sale/purchase price that is apportioned to the tax fixtures.
• The pooling requirement captures the historic expenditure by the vendor into the tax computation so that HMRC has visibility of the relevant figures.

Here is an interesting situation: I am a tax adviser to the former owners of a small hotel following a retirement sale to a new team who are refurbishing the hotel to give it a new lease of life. The purchaser’s tax advisers have asked that we sign off...