198 elections on overseas property

198 elections on overseas property

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I act for a UK company that owns a commercial property in Germany.Capital allowances had been claimed on this property.The property is now going to be sold to a German investor/company by means of an asset sale.There is a considerable capital allowance pool related to the property.Can a s198 CAA 2001 election be made in relation to the property. Per the legislation there seems to be no bar. However there is little authority/comment out there- I've found one article that suggests an overseas company will not be able to sign a s198 election and technically HMRC could reject the election as the purchaser has no UK tax presence.If a s198 election cannot be made what is the procedure-presumably a just and reasonable apportionment?Views/thoughts would be welcomed.

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By duncanedwards
06th Sep 2014 18:27

Sounds a bit EU discriminatory

if an EU purchaser can't sign?

Is S197 in point?

http://www.legislation.gov.uk/ukpga/2001/2/section/197

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By Portia Nina Levin
07th Sep 2014 12:41

Section 198 does not come into it

Section 198 is simply a mechanism by which the disposal value statement in section 187A might be satisfied.

However, in all cases after 5 April (31 March for companies) 2014, the pooling requirement in section 187A must be met, which means that the vendor would have had to have claimed capital allowances, and, therefore, be required to bring in a balancing adjustment.

That having been said, this is not the place to ask your question. You should engage (and pay for) specialist advice.

Asking the question here will give you a range of answers, some of which might be right, some of which will be wrong, and some of which will just be daft.

I think I am right, but you should engage a specialist to confirm. All we need now is a wrong answer to complete the set.

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