My client is the purchaser of a business, and the assets consist of goodwill and plant and machinery (P&M). Both parties have initially agreed an overall value for the business, which of course, incorporates both. The P&M comprises machines (it is an engineering company), so surely the price allocated to P&M is disposal proceeds for the vendor (which may create balancing charges or allowances for capital allowances purposes) and subject to the annual investment allowance (assuming the limit is not exceeded) but not for the buyer, as it is not fixed P&M and not subject to any possible elections.  

Arthur Weller replies:  

Whatever the seller and buyer agree is the price attributed to the P&M in the sale and purchase (SAP) agreement will be used for future capital allowances claims by the purchaser. Even though the P&M is being acquired second hand, the annual investment allowance should still be available to the purchaser.