Capital Allowances Act 2001

165 Abandonment expenditure within 3 years of ceasing ring fence trade U.K.

(1) This section applies if—

(a) a person (“the former trader”) has ceased to carry on a ring fence trade,

(b) the former trader incurs abandonment expenditure F1 ... within the post-cessation period, and

(c) the abandonment expenditure is not otherwise deductible in calculating the income of the former trader for any tax purpose.

(2) “The post-cessation period” means the period of 3 years immediately following the last day on which the former trader carried on the ring fence trade.

(3) If this section applies—

(a) an amount equal to the relevant abandonment cost is allocated to the appropriate pool for the chargeable period in which the former trader ceased to carry on the ring fence trade, and

(b) [F2 where any of the abandonment expenditure was incurred on the demolition of plant or machinery,]any amount received within the post-cessation period for the remains of the plant or machinery does not constitute income of the former trader for any tax purpose.

(4) In subsection (3)—

• “the appropriate pool” means the pool to which the expenditure on the demolished plant or machinery has been allocated, and

• “the relevant abandonment cost” means the amount by which the abandonment expenditure exceeds any amounts received within the post-cessation period for the remains of [F3 any plant or machinery on whose demolition any of the abandonment expenditure was incurred].

(5) All such adjustments, by discharge or repayment of tax or otherwise, are to be made as are necessary to give effect to this section.

Textual Amendments

F1 Words in s. 165(1)(b) repealed (retrospectively) by Finance Act 2001 (c. 9) , s. 68 , 110 , Sch. 20 Pt. 2 para. 8(2) , Sch. 33 Pt. 2(5) , Note 2

F2 Words in s. 165(3)(b) inserted (with effect as mentioned in Sch. 20 para. 9(1)(5)(8) of the amending Act) by Finance Act 2001 (c. 9), s. 68, Sch. 20 para. 8(3)

F3 Words in s. 165(4) substituted (with effect as mentioned in Sch. 20 para. 9(1)(5)(8) of the amending Act) by Finance Act 2001 (c. 9), s. 68, Sch. 20 para. 8(4)