As discussed in ¶1131-700, the tax authorities’ thinking in framing former CAA 2001, s. 222–224 and 226 seems to have been that it was unacceptable for an owner of plant or machinery who had claimed, but not been able to utilise, the capital allowances on the plant or machinery to ‘transfer’ those allowances to a purchaser by effecting a sale and lease-back transaction. By restricting the capital allowance entitlement of the purchaser (lessor) to an amount equal to the notional written-down value of the plant or machinery, it was evidently thought that an unacceptable reduction in the UK tax yield would be avoided.

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