Capital Allowances Act 2001 section 370

Purchase of relevant interest before first use of agricultural building

Section 370 deals with how qualifying expenditure is calculated when someone purchases the relevant interest in an agricultural building before the building has been used for the first time.

• When an agricultural building constructed for husbandry purposes is sold before it is first used, the qualifying expenditure is the lower of the original construction cost and the capital sum paid by the purchaser.
• The original construction cost must be reduced by any amounts excluded under the rules in section 369, and the purchase price must be apportioned on a just and reasonable basis to strip out amounts relating to assets (such as land) that do not qualify for allowances under this part of the Act.
• The qualifying expenditure is treated as incurred at the time the capital sum became payable by the purchaser.
• If the relevant interest changes hands more than once before the building is first used, only the final sale is taken into account when determining qualifying expenditure.