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HMRC caps fixtures election amount at sale price of land interest
The manual now caps the elected fixture amount at the sale price of the interest in land, replacing the old reference to the fixture's sale price or premium; the allowance-history ceiling is unchanged.
By Taxxa AI OyPublished 29 September 2026
Where an interest in land that includes a fixture is sold and the seller must bring a disposal value into account because allowances were claimed or expenditure pooled, the seller and purchaser can jointly elect to fix the amount attributable to the fixture. The election fixes both the seller's disposal value and the purchaser's qualifying expenditure.
An election under section 198 of the Capital Allowances Act 2001 is available where the qualifying interest is sold at or above market value, or where an incoming lessee has paid a premium at or above market value for an interest in land that includes a fixture. An election under section 199 is available where an incoming lessee has paid a premium for such an interest and the lessor and lessee jointly elect under section 183 for the lessee to be treated as the owner of the fixture.
The amount apportioned to the fixture under either election may not exceed two ceilings. The first is the amount on which the seller was able to claim allowances in respect of the fixture. The second is now stated as the sale price of the interest in land.GOV That wording replaces the previous formulation, which referred to the sale price of the fixture or the premium paid for it.
GOV The statute frames the ceiling as the actual sale price in section 198 cases and the actual capital sum in section 199 cases, alongside the capital expenditure the seller or lessor was treated as incurring on the fixture. Practitioners agreeing an elected figure should therefore test it against the price paid for the land interest as a whole (or the capital sum, for a premium), not against a standalone value for the fixture itself.
Any remainder of the sale price or premium is attributed to the other property included in the sale and apportioned between that other property where necessary. The election procedure is set out in the manual at CA26850, and elections must be made by notice to an officer of Revenue and Customs no later than two years after the purchaser acquires the qualifying interest or the lessee is granted the lease.
An election has no effect on the disposal value where section 197, covering disposal values in avoidance cases, applies. Where there is evidence that elections are being misused to avoid tax, the facts and the suspected abuse should be reported briefly to BAI (Capital Allowances Team - Technical).
Legal basis: Capital Allowances Act 2001, sections 183, 197, 198, 199 and 200.
When agreeing a section 198 or 199 fixtures election, cap the elected amount at the sale price of the interest in land and at the seller’s allowance history, not at a standalone value for the fixture itself.