My clients sold commercial premises (which they had built in 2008) for over £4m in July 2019. It was rented (to the purchaser) up to the date of sale and income tax relief claimed on capital allowances for plant and machinery integral features and general pool items (for which I have detailed schedules of the original cost).
I was expecting a CAA 2001 S198 election to be done at time of sale for the plant and machinery. I had provided details of the tax written down values at 5 April 2018 (£128,000) when the premises were going to be sold to another purchaser but that fell through and I was not aware of the subsequent sale until after it was done. I have just asked the vender’s solicitor for a copy of the election so I can calculate the balancing charge / allowance but was told that the new purchaser didn’t seek any election regarding the transfer of capital allowances and no specific provision was made within the sale agreement.
Does my client need to submit a CAA 2001 S198 election before July 2021 to obtain a disposal value? Can the disposal value of the plant and machinery be say £1 so my client can claim a large balancing allowance or does the new owner need to agree to the value?