Capital Allowances Act 2001 section 215

Transactions to obtain tax advantages

Section 215 restricts plant and machinery allowances and increases balancing charges where transactions are entered into with a tax avoidance purpose.

• Where a buyer (B) and seller (S) enter into a relevant transaction that has an avoidance purpose, or is part of a scheme or arrangement with an avoidance purpose, allowances are restricted and balancing charges may be imposed or increased
• A transaction, scheme or arrangement has an avoidance purpose if one of its main purposes is to enable any person to obtain a tax advantage under Part 2 of the Act that would not otherwise be obtained — including obtaining a more favourable allowance or avoiding a balancing charge
• Different restriction rules apply depending on the type of tax advantage obtained: where it relates to disposal values, where the buyer gains a higher percentage rate or earlier entitlement to allowances, or where other kinds of advantage arise
• Where a transaction involves more than one type of tax advantage, the restriction rules apply separately to each type of advantage