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the right to elect to substitute market value for the price agreed by the parties.450 A separate rule directs the adjustment of the proceeds of sale where the relevant interest is disposed of subject to a subordinate interest; the value of the subordinate interest may not be ignored.451 |
CAA section 570A, the anti-avoidance rule explained at §24A.3.6, applies here also. |
24A.4A Conversion of Parts of Business Premises into Residential Flats |
| Part 4A is added by FA 2001 to give capital allowances for expenditure on converting or renovating qualifying business premises into flats. The new scheme must be seen in the context of other fiscal incentives to assist urban regeneration—brown land. |
| Unlike the allowances for hotels this is not fitted into the structure of the industrial buildings allowance but is free standing and becomes part 4A of CAA 2001. However the IBA is clearly the model for this as is shown by the use of the concept of the relevant interest.452 The writing down allowance is 25% of the relevant expenditure but there is also an initial (not first year) allowance of 100%.453 There are also rules for calculating balancing adjustments.454 The allowance is given in calculating the profits of the claimant’s schedule A business relating to the flat; if there is no such business one is deemed to exist.455 |
| The relief is meant to be precisely targeted so no allowance may be claimed for expenditure on acquiring the land, extending the building, developing adjacent land or providing furniture or chattels.456 The construction of the building must have been completed before 1980 but the legislation is silent on the effect of building works since then. The building must have the ground floor authorised for business use; it must have not more that four storeys above the ground floor (ignoring attics) and it must appears that the storeys above the ground floor were originally intended for use as a dwelling.457 There are also detailed rules about which flats qualify. So it must be suitable for letting as a dwelling, held for short term letting (not more than 5 years), have not more than four rooms (as defined) and not be a high value flat.458 |
CAA section 570A, the anti-avoidance rule explained at §24A.3.6, applies here also. |
24A.5 Mining |
UK companies operating abroad usually derive their money from mining metals and petroleum. Companies operating within the UK mine building materials, notably sand and gravel, china clay and slate. The history of capital allowances has been erratic to say the least and different rules apply according to the place being mined. The current rules were introduced by FA 1986.459 They apply where the taxpayer carries on a mineral extraction trade, ie working of a source of mineral deposits, the last phrase being extended to geothermal energy.460 |