Finance Act 1971

40 Application of new system

(1) Subject to subsections (2) and (3) below, this Chapter applies to capital expenditure on the provision of machinery or plant incurred on or after 27th October 1970; and, in the case of expenditure to which this Chapter applies, no allowances or charges shall be made under Chapter II of Part I of the [1968 c. 3.] Capital Allowances Act 1968.

(2) This Chapter shall not apply to capital expenditure incurred by any person on the provision of second-hand machinery or plant if capital expenditure on providing the machinery or plant was incurred by another person before the said 27th October and—

(a) he and that other person are connected with each other within the terms of section 533 of the Taxes Act, or

(b) it appears with respect to the transaction under which the first-mentioned expenditure is incurred, or with respect to transactions of which it is one, that the sole or main benefit which, but for this subsection, might have been expected to accrue to the parties or any of them was the obtaining of an allowance under this Chapter.

(3) Where any capital expenditure is incurred before the said 27th October on the provision of machinery or plant under a contract which provides that a person shall or may become the owner of the machinery or plant on the performance of the contract, this Chapter shall not apply to any capital expenditure incurred under the contract in respect of that machinery or plant unless it is first brought into use by that person on or after that date.