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HMRC internal manual

Capital Allowances Manual

PMA: Fixtures: Restriction where industrial buildings allowance or research and development allowance claimed previously

CAA01/S186 - S187

Again the aim of the legislation is to limit the allowances given overall on a fixture to original cost. Where a person (‘the past owner’) has claimed industrial buildings allowance on a building that includes a fixture and the relevant interest in the building is transferred to another person (‘the current owner’) the current owner may want to claim PMAs on the fixture. The amount on which PMAs may be claimed by the current owner is limited to the part of the residue of qualifying expenditure immediately after the sale that relates to the fixtures. This means that the current owner’s expenditure qualifying for PMAs can never be more than the original construction costs because the residue of qualifying expenditure is the qualifying expenditure still to be written off CA34800.

Where the past owner has claimed research and development allowance on a building that includes a fixture and the current owner claims a PMA on the fixture the current owner’s expenditure qualifying for PMA is limited to the part of the disposal value (or cost if lower), which relates to the fixture.