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HMRC internal manual

Capital Allowances Manual

HM Revenue & Customs
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General: Contributions: Contributions towards ABA expenditure

CAA01/S540 & S542, FA08/Sch.27/Para10

The provisions giving ABA on contributions towards expenditure on an agricultural building were omitted by FA08, in relation to chargeable periods beginning on or after 1 April 2011 for CT purposes or 6 April 2011 for IT purposes.

For chargeable periods beginning before those dates, a person who makes a contribution towards another person’s expenditure can claim ABA on that contribution if:

* the general conditions for a contributions allowance are satisfied [CA14400](, 
* the person makes the contribution for a trade etc. that is carried on by that person or a tenant of land in which the person has an interest. 
The contribution is treated as expenditure on an asset similar to the one towards which the contribution was made (a virtual asset), as if that virtual asset were in use for the purposes of the trade etc. and as if the contributor had the relevant interest in the virtual asset. This means that the contribution qualifies for ABA provided that the building towards which the contribution is made is an agricultural building. If the contribution was made for the purposes of a tenant's trade and the contributor's interest in the land occupied by the tenant is transferred the person to whom it is transferred can claim ABAs after the transfer. 

If the contribution was made for the purposes of the contributor's trade and that trade is transferred WDAs after the transfer are made to the person to whom the trade is transferred. If part of the trade is transferred make WDAs to the transferee to the extent that they are attributable to the part transferred.