Capital Allowances Act 2001 section 217

No annual investment allowance or first-year allowance for B's expenditure

Section 217 prevents the buyer (B) from claiming an annual investment allowance or first-year allowance on expenditure arising from certain anti-avoidance transactions involving connected persons, tax advantage schemes, or sale and leaseback arrangements.

• Where a transaction is caught by the anti-avoidance rules in sections 214, 215, or 216, the buyer (B) cannot claim any annual investment allowance or first-year allowance on their expenditure under that transaction.
• If an annual investment allowance or first-year allowance has already been given to B before the restriction is identified, that allowance must be withdrawn.
• There is an exception: this restriction does not apply where the plant or machinery is the subject of a sale and finance leaseback arrangement as specifically defined in section 221.
• The effect is to ensure that buyers involved in transactions designed to exploit capital allowances through connected party deals, tax advantage schemes, or sale and leaseback structures cannot benefit from accelerated tax relief.