Modifications etc. (not altering text)
C1Pt. II (ss. 22–83) modified by Finance Act 1990 (c. 29), s. 87(3)(4)
C2Pt. II modified (19.9.1994) by Coal Industry Act 1994 (c. 21), s. 68(4), Sch. 4 para. 22; S.I. 1994/2189, art. 2, Sch.
(1)Subject to sections 76 and 77, where a person incurs capital expenditure on the provision by purchase of machinery or plant, and—
(a)he and the seller are connected with each other, or
(b)the machinery or plant continues to be used for the purposes of a trade carried on by the seller, or
(c)it appears with respect to the sale, or with respect to transactions of which the sale 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 Part,
a first-year allowance shall not be made in respect of the expenditure [F1or any additional VAT liability incurred in respect of it] or, if made, shall be withdrawn, and there shall be disregarded for the purposes of sections 24, 25 and 26 [F2so much (if any) of the aggregate of the expenditure and any such additional VAT liability] as exceeds the disposal value to be brought into account under those sections by reason of the sale.
(2)Subject to sections 76 and 77, where a person enters into a contract under which, on the performance thereof, he will or may become the owner of machinery or plant belonging to another person, and—
(a)he and that person are connected with each other, or
(b)the machinery or plant continues to be used for the purposes of a trade carried on by that person, or
(c)it appears with respect to the transaction, 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 Part,
a first-year allowance shall not be made in respect of any expenditure incurred by him under the contract so far as relating to that machinery or plant [F3or in respect of any additional VAT liability incurred by him in respect of any such expenditure] or, if made, shall be withdrawn, and there shall be disregarded for the purposes of sections 24, 25 and 26 [F4so much (if any) of the aggregate of the expenditure and any such additional VAT liability] as exceeds the disposal value to be brought into account under those sections by reason of the contract so far as relating thereto.
(3)Subject to sections 76 and 77, where a person, being entitled to the benefit of a contract under which, on the performance thereof, he will or may become the owner of any machinery or plant, assigns the benefit of the contract so far as it relates to that machinery or plant to another person, and—
(a)he and the assignee are connected with each other, or
(b)the machinery or plant continues to be used for the purposes of a trade carried on by him, or
(c)it appears with respect to the assignment, or with respect to transactions of which the assignment 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 Part,
a first-year allowance shall not be made in respect of any expenditure incurred by him under the contract so far as so relating, or by way of consideration for the assignment [F5or in respect of any additional VAT liability incurred by him in respect of any such expenditure] or, if so made, shall be withdrawn, and there shall be disregarded for the purposes of sections 24, 25 and 26 [F6so much (if any) of the aggregate of the assignee’s expenditure and any such additional VAT liability] as exceeds the disposal value to be brought into account under section 60 by reason of the assignment.
(4)In this section references to persons connected with each other shall be construed in accordance with section 839 of the principal Act.
(5)All such assessments and adjustments of assessments shall be made as are necessary to give effect to this section.
Textual Amendments
F1Words in s. 75(1) inserted (for any chargeable period or its basis period ending on or after 06.04.1990) by Finance Act 1991 (c. 31), s. 59, Sch. 14 Pt. II para. 11(1)(a).
F2Words in s. 75(1) substituted (for any chargeable period or its basis period ending on or after 06.04.1990) by Finance Act 1991 (c. 31), s. 59, Sch. 14 Pt. II para. 11(1)(b).
F3Words in s. 75(2) inserted (for any chargeable period or its basis period ending on or after 06.04.1990) by Finance Act 1991 (c. 31), s. 59, Sch. 14 Pt. II para. 11(2)(a).
F4Words in s. 75(2) substituted (for any chargeable period or its basis period ending on or after 06.04.1990) by Finance Act 1991 (c. 31), s. 59, Sch. 14 Pt. II para. 11(2)(b).
F5Words in s. 75(3) inserted (for any chargeable period or its basis period ending on or after 06.04.1990) by Finance Act 1991 (c. 31), s. 59, Sch. 14 Pt. II para. 11(3)(a).
F6Words in s. 75(3) substituted (for any chargeable period or its basis period ending on or after 06.04.1990) by Finance Act 1991 (c. 31), s. 59, Sch. 14 Pt. II para. 11(3)(b).