As a result of changes to the capital allowances legislation from 1 April 2014, there is a pooling requirement that must take place before a buyer of a commercial property can take over the capital allowances on a property.
The seller of the building must capture the available capital allowances within the property and show them in the general pool, or in special rate pool if the buyer is to benefit from any of these allowances post-sale.
In Glais House Care Limited v HMRC (TC06945), HMRC argued the company could not claim capital allowances embedded in the care home property which had been identified to be £318,792, following a specialist report being obtained.
The vendor had shown in their disposal proceeds only £1 for fixed items of plant within the building, (and £35,000 for loose items of plant). Had this transaction taken place on or after 1 April 2014, you would expect an election (under CAA 2001 s 198) to have been completed. In that case if £1 was included as the value, this would be the value that Glais House Care Limited could take into its Capital Allowance pool. But the transaction took place in May 2011.
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