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HMRC internal manual

Capital Allowances Manual

PMA: Fixtures: Acquisition of land including fixture previously leased under an equipment lease


A person may acquire an existing interest in land that includes a fixture previously let under an equipment lease. If the person pays a capital sum to discharge the obligations of the equipment lessee under the equipment lease in connection with the acquisition, the fixture is treated as belonging to that person in consequence of incurring that expenditure.

This does not apply if immediately after the acquisition there is somebody else who holds an another interest in any land in which all or part of the relevant land is comprised and the person holding that interest has a prior right CA26250 in relation to the fixture.


In the example at CA26200, the Redding Lift Company, an equipment lessor, leases a lift to Budokan Computers. Budokan Computers assigns its lease to Zanzibar Ltd. If Zanzibar Ltd pays £10,000 to the Redding Lift Company to discharge Budokan Computers’ obligations under the lease, Zanzibar Ltd. can claim capital allowances on that £10,000 (restricted to Redding’s disposal value CA26400). However, Zanzibar Ltd. will not be able to claim capital allowances if there is a person with a prior right to allowances in respect of the lift.