Taxes Consolidation Act 1997 section 269

Meaning of "the relevant interest"

Section 269 defines the term "the relevant interest" for the purposes of the industrial buildings allowance rules, identifying which legal interest in a building or structure qualifies the holder to claim capital allowances in respect of construction expenditure.

• The "relevant interest" is the legal interest (freehold or leasehold) held by the person who incurred the construction expenditure at the time that expenditure was incurred — this interest determines who may claim writing-down allowances and who is subject to balancing allowances or charges.
• Where the person who incurred the expenditure holds two or more interests in the building, the interest that is reversionary on all the others (i.e. the largest or most superior interest) is treated as the relevant interest.
• Creating a lease or other subordinate interest out of the relevant interest does not cause it to lose its status — the original interest remains the relevant interest regardless of any tenancies granted.
• Where a leasehold interest that is the relevant interest merges into a freehold or superior lease (whether by surrender or by the leaseholder acquiring the reversion), the freehold or superior lease automatically becomes the new relevant interest, preserving continuity of allowances.