Capital Allowances Act 2001

Capital Allowances Act 2001

2001 CHAPTER 2

Commentary on Sections

Glossary

Part 2: Plant and machinery allowances

Chapter 14: Fixtures

Section 196: Disposal values in relation to fixtures: general

696. This section is based on sections 57(1) and 59 and part of section 58(2), (4) and (5) of CAA 1990. It determines the basic disposal value to be taken into account in different scenarios in respect of a fixture.

697. Subsection (1) provides a Table showing the different disposal values depending on the circumstances. Item 2 of the Table refers to a condition that needs to be satisfied. The alternate legs of this condition are in subsection (2).

698. Subsection (3) makes it clear that disposals dealt with by item 1 or 5 are subject to an election being made under section 198 or 199.

699. Subsection (4) provides that references to “equipment lessee” include any person in whom the financial obligations under the equipment lease may have been vested.

700. Subsection (5) makes it clear that a taxpayer may need to bring a disposal value into account under the rules of Chapter 5 because of an event not covered by this Chapter.

701. Subsection (6) makes it clear that these disposal values are subject to section 197 which deals with avoidance cases.

702. Section 59(11) of CAA 1990 has been rewritten in paragraph 41 of Schedule 3.