Income Tax (Trading and Other Income) Act 2005

166 Allocation of site preparation expenditure

(1) The amount of site preparation expenditure allocated to a period of account for the purposes of section 165(2) is the amount given by the formula—

where—

• RE means residual expenditure (see subsection (2)),

• WD means the volume of waste materials deposited on the waste disposal site during the period, and

• SV means the volume of the waste disposal site not used up for the deposit of waste materials at the end of the period.

(2) “Residual expenditure” means the total of all site preparation expenditure incurred by the trader in relation to the waste disposal site at any time before the end of the period, less—

(a) any of that expenditure for which an allowance has been, or may be, made for income or corporation tax purposes under the enactments relating to capital allowances,

(b) any of that expenditure for which a deduction has been allowed in calculating for income or corporation tax purposes the profits of an earlier period of account, and

(c) if the trader started to carry on the trade before 6th April 1989, the excluded amount of any unrelieved old expenditure (see subsections (3) and (4)).

(3) The excluded amount of unrelieved old expenditure is calculated by multiplying the unrelieved old expenditure (see subsection (4)) by the fraction—

where—

• WD means the volume of waste materials deposited on the site before 6th April 1989, and

• SV means the volume of the site not used up for the deposit of waste materials immediately before that date.

(4) “Unrelieved old expenditure” means site preparation expenditure which—

(a) was incurred by the trader in relation to the waste disposal site before 6th April 1989, and

(b) does not fall within subsection (2)(a) or (b).