Capital Allowances Act 2001 section 262AEA

Co-ownership schemes: withdrawal of election

Section 262AEA allows the operator of a co-ownership scheme to withdraw a previous election to treat the scheme as a single entity for plant and machinery allowance purposes, where a structures and buildings allowance becomes available in respect of property held within the scheme.

• Where a co-ownership scheme has elected to be treated as a single entity for plant and machinery purposes and a structures and buildings allowance becomes available for a building or structure within the scheme, the operator may withdraw the election by notifying HMRC
• The notice of withdrawal must be given no later than 12 months after the end of the accounting period in which the relevant building or structure is first brought into qualifying use for structures and buildings allowance purposes
• Once withdrawn, the election ceases to have effect from the accounting period in which the notice is given, and for all subsequent accounting periods — the scheme's property is treated as ceasing to be owned by the scheme and as being acquired by the individual participants in just and reasonable proportions
• On withdrawal, the disposal value brought into account for plant and machinery purposes is the tax written-down value, meaning there is no balancing charge or balancing allowance arising solely from the withdrawal