Modifications etc. (not altering text)
C1 S. 45H(2) modified (with effect in accordance with s. 167 of the amending Act) by Finance Act 2003 (c. 14) , Sch. 30 para. 7
(1)For the purposes of this Act, the general rule is that a person (“R”) is to be regarded as not having incurred expenditure to the extent that it has been, or is to be, met (directly or indirectly) by—
(a)a public body, or
(b)a person other than R.
(2)In this Chapter “public body” means the Crown or any government or public or local authority (whether in the United Kingdom or elsewhere).
(3)The general rule does not apply for the purposes of Part 9 (dredging allowances).
(4)The general rule is subject to the exceptions in sections 534 to 536.
Modifications etc. (not altering text)
C2S. 532 modified (1.4.2010) by 2005 c. 5, s. 225T(7) (as inserted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 1 para. 2 (with Sch. 9 paras. 1-9, 22))
(1)For the purposes of Part 9, a person (“D”) who has incurred expenditure is to be regarded as not having incurred it for the purposes of a trade carried on or to be carried on by D to the extent that it has been, or is to be, met (directly or indirectly) by—
(a)a public body, or
(b)capital sums contributed by another person for purposes other than those of D’s trade.
(2)Subsection (1) is not subject to the exceptions in sections 534 to 536.
(1)A person is to be regarded as having incurred expenditure (despite section 532(1)) to the extent that it is met (directly or indirectly) by a grant—
(a)made under Northern Ireland legislation, and
(b)declared by the Treasury by order to correspond to a grant under Part II of the Industrial Development Act 1982 (c. 52).
(2)Subject to subsection (3), the grant is to be treated as not falling within subsection (1) if, by virtue of paragraph 8 of Schedule 3 to OTA 1975, expenditure which has been or is to be met by the grant is not to be regarded for any of the purposes of Part I of OTA 1975 as having been incurred by any person.
(3)If only a proportion of the expenditure which has been or is to be met by the grant is expenditure which, if it were not so met, would be allowable under section 3 or 4 of OTA 1975, only a corresponding proportion of the grant is to be treated as not falling within subsection (1).
A person is to be regarded as having incurred expenditure (despite section 532(1)) to the extent that it is met (directly or indirectly) by—
(a)insurance money, or
(b)other compensation money,
payable in respect of an asset which has been destroyed, demolished or put out of use.
(1)A person (“R”) is to be regarded as having incurred expenditure (despite section 532(1)) to the extent that the requirements in subsections (2) and (3) are satisfied in relation to the expenditure.
(2)The first requirement is that the person meeting R’s expenditure (“C”) is not a public body.
(3)The second requirement is that—
(a)no allowance can be made under Chapter 2 in respect of C’s expenditure, and
(b)the expenditure is not allowed to be deducted in calculating the profits of a trade or relevant activity carried on by C.
(4)When determining for the purposes of subsection (3)(a) whether an allowance can be made under Chapter 2, assume that C is within the charge to tax.
(5)In subsection (3)(b) “relevant activity” means—
(a)for the purposes of Part 2—
(i)an ordinary [F1UK] [F2property] business;
(ii)a [F3UK furnished] holiday lettings business;
(iii)an [F4ordinary overseas] property business;
[F5(iiia)an EEA furnished holiday lettings business;]
(iv)a profession or vocation;
(v)any concern listed in [F6section 12(4) of ITTOIA 2005 or] [F7section 39(5) of CTA 2009] (mines, transport undertakings etc.);
(vi)the management of an investment company;
(b)for other purposes, a profession or vocation.
Textual Amendments
F1Word in s. 536(5)(a)(i) inserted (with effect in accordance with Sch. 14 para. 13 of the amending Act) by Finance Act 2011 (c. 11), Sch. 14 para. 12(15)(a)
F2 Word in s. 536(5)(a)(i) substituted (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5) , s. 883(1) , Sch. 1 para. 570(a) (with Sch. 2 )
F3Words in s. 536(5)(a)(ii) substituted (with effect in accordance with Sch. 14 para. 13 of the amending Act) by Finance Act 2011 (c. 11), Sch. 14 para. 12(15)(b)
F4Words in s. 536(5)(a)(iii) substituted (with effect in accordance with Sch. 14 para. 13 of the amending Act) by Finance Act 2011 (c. 11), Sch. 14 para. 12(15)(c)
F5S. 536(5)(a)(iiia) inserted (with effect in accordance with Sch. 14 para. 13 of the amending Act) by Finance Act 2011 (c. 11), Sch. 14 para. 12(15)(d)
F6 Words in s. 536(5)(a)(v) inserted (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5) , s. 883(1) , Sch. 1 para. 570(b) (with Sch. 2 )
F7Words in s. 536(5)(a)(v) substituted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 516 (with Sch. 2 Pts. 1, 2)
Textual Amendments
F8Words in s. 537(1) cross-heading substituted (with effect in accordance with s. 92 of the amending Act) by Finance Act 2005 (c. 7), Sch. 6 para. 5; S.I. 2007/949, art. 2
(1)This section gives general conditions for making contribution allowances under [F9Parts 2F11... and 5].
(2)The general conditions are that—
(a)a person (“C”) has contributed a capital sum to expenditure on the provision of an asset,
(b)the expenditure would (ignoring section 532(1))—
(i)have been regarded as wholly incurred by another person (“R”), and
(ii)if R is not a public body, have entitled R to allowances under Part 2F12... or 5 or to allocate the expenditure to a pool under Part 2, and
(c)C and R are not connected persons.
(3)In this section “public body” means the Crown or any public or local authority in the United Kingdom.
(4)In this Chapter “relevant activity” has the meaning given by section 536(5).
Textual Amendments
F9Words in s. 537(1) substituted (with effect in accordance with s. 92 of the amending Act) by Finance Act 2005 (c. 7), Sch. 6 para. 5; S.I. 2007/949, art. 2
F10Words in s. 537 heading omitted (with effect in accordance with Sch. 27 para. 30(1) of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 27 para. 8(c)
F11Words in s. 537(1) omitted (with effect in accordance with Sch. 27 para. 30(1) of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 27 para. 8(a)
F12Words in s. 537(2)(b)(ii) omitted (with effect in accordance with Sch. 27 para. 30(1) of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 27 para. 8(b)
(1)This section is about contribution allowances under Part 2 and applies if—
(a)the general conditions for contribution allowances are met, F13...
[F14(aa)C's contribution is to expenditure on the provision of plant or machinery, and]
(b)C’s contribution is made for the purposes of a trade or relevant activity carried on, or to be carried on, by C.
(2)C is to be treated for the purposes of allowances under Part 2 as if—
(a)the contribution were expenditure incurred by C on the provision, for the purposes of C’s trade or relevant activity, of the [F15plant or machinery],
(b)C owned the [F16plant or machinery] as a result of incurring that expenditure at any time when R owns it or is treated under Part 2 as owning it, and
(c)the [F17plant or machinery] were at all material times [F18plant or machinery] in use for the purposes of C’s trade or relevant activity.
(3)Expenditure treated as incurred under subsection (2)(a), if allocated to any pool, must be allocated to a single asset pool.
(4)Subsections (5) and (6) apply for the purposes of contribution allowances under Part 2 if the whole or a part of the trade or relevant activity for the purposes of which C’s contribution was made is transferred.
(5)If the whole of the trade or relevant activity is transferred, writing-down allowances for chargeable periods ending after the date of the transfer are to be made to the transferee instead of to the transferor.
(6)If a part of the trade or relevant activity is transferred, writing-down allowances for chargeable periods ending after the date of the transfer are to be made to the transferee instead of to the transferor to the extent that they are properly referable to the part transferred.
Textual Amendments
F13Word in s. 538(1)(a) omitted (with effect in accordance with s. 73(4)-(6) of the amending Act) by virtue of Finance Act 2013 (c. 29), s. 73(2)
F14S. 538(1)(aa) inserted (with effect in accordance with s. 73(4)-(6) of the amending Act) by Finance Act 2013 (c. 29), s. 73(2)
F15Words in s. 538(2)(a) substituted (with effect in accordance with s. 73(4)-(6) of the amending Act) by Finance Act 2013 (c. 29), s. 73(3)(a)
F16Words in s. 538(2)(b) substituted (with effect in accordance with s. 73(4)-(6) of the amending Act) by Finance Act 2013 (c. 29), s. 73(3)(b)
F17Words in s. 538(2)(c) substituted (with effect in accordance with s. 73(4)-(6) of the amending Act) by Finance Act 2013 (c. 29), s. 73(3)(c)(i)
F18Words in s. 538(2)(c) substituted (with effect in accordance with s. 73(4)-(6) of the amending Act) by Finance Act 2013 (c. 29), s. 73(3)(c)(ii)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Textual Amendments
F19S. 539 omitted (with effect in accordance with Sch. 27 para. 30(1) of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 27 para. 9
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Textual Amendments
F20S. 540 omitted (with effect in accordance with Sch. 27 para. 30(1) of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 27 para. 10
(1)This section is about contribution allowances under Part 5 and applies if—
(a)the general conditions for contribution allowances are met, and
(b)C’s contribution is made for the purposes of a trade carried on, or to be carried on, by C.
(2)C is to be treated for the purposes of allowances under Part 5 as if—
(a)the contribution were expenditure incurred by C on the provision, for the purposes of C’s trade, of an asset similar to that provided by means of C’s contribution, and
(b)the asset were at all material times in use for the purposes of C’s trade.
(1)Subsections (2) and (3) apply for the purposes of contribution allowances under [F22Part 5] if—
(a)C’s contribution was made for the purposes of C’s trade F21..., and
(b)the whole or a part of the trade F21... is subsequently transferred.
(2)If the whole of the trade F21... is transferred, writing-down allowances for chargeable periods ending after the date of the transfer are to be made to the transferee instead of to the transferor.
(3)If a part of the trade F21... is transferred, writing-down allowances for chargeable periods ending after the date of the transfer are to be made to the transferee instead of to the transferor to the extent that they are properly referable to the part transferred.
Textual Amendments
F21Words in s. 542 repealed (31.1.2013) by Statute Law (Repeals) Act 2013 (c. 2), s. 3(2), Sch. 1 Pt. 10 Group 1
F22Words in s. 542(1) substituted (with effect in accordance with Sch. 27 para. 30(1) of the amending Act) by Finance Act 2008 (c. 9), Sch. 27 para. 11
A person who contributes a capital sum to expenditure incurred by another person on dredging is to be regarded for the purposes of Part 9 as incurring capital expenditure on that dredging.