Capital Allowances Act 1990 (repealed)

Chapter II U.K. Writing-down Allowances, Balancing Allowances and Balancing Charges

3 Writing-down allowances. U.K.

(1) Subject to the provisions of this Act, where—

(a) any person is, at the end of a chargeable period F1 ... , entitled to an interest in a building or structure, and

(b) at the end of that chargeable period F1 ... , the building or structure is an industrial building or structure, and

(c) that interest is the relevant interest in relation to the capital expenditure incurred on the construction of that building or structure,

an allowance (“a writing-down allowance”) shall be made to him for that chargeable period.

(2) The writing-down allowance shall be equal to one-twentyfifth or, where the expenditure was incurred before 6th November 1962, one-fiftieth of the expenditure mentioned in subsection (1)(c) above, except that for a chargeable period of less [F2 or more] than a year that fraction of one-twentyfifth or one-fiftieth shall be proportionately reduced [F2 or increased].

F3 [(2A) Where the person entitled to the relevant interest in relation to any capital expenditure incurred on the construction of a building or structure incurs an additional VAT liability in respect of any of that capital expenditure, then—

(a) that liability shall be regarded for the purposes of this Act as capital expenditure incurred by him on the construction of the building or structure, and

(b) the residue (as defined in section 8(1)) of the expenditure incurred on the construction of the building shall accordingly be deemed for the purposes of this Part to be increased as at the time at which the liability is incurred by an amount equal to the liability.

(2B) Where an additional VAT liability is incurred as mentioned in subsection (2A) above, then (subject to any further adjustment under this subsection on any later such event or under subsection (2C) or (3) below) the writing-down allowance for any chargeable period, if that chargeable period F1 ... ends after the time at which the liability is incurred, shall be the residue of the capital expenditure immediately after the incurring of the liability, reduced in the proportion (if it is less than one) which the length of the chargeable period bears to the part unexpired, at the date of the incurring of the liability, of the period of 25 years beginning with the time when the building or structure was first used.

(2C) In any case where—

(a) an additional VAT rebate in respect of any capital expenditure incurred on the construction of a building or structure is made to the person entitled to the relevant interest in relation to that expenditure, and

(b) the residue of that expenditure immediately before the making of the rebate is not less than the amount of the rebate,

then (subject to any further adjustment under this subsection on any later such event or under subsection (2B) above or (3) below) the writing-down allowance for any chargeable period, if that chargeable period F1 ... ends after the time at which the rebate is made, shall be the residue of that expenditure immediately after the making of the rebate, reduced in the proportion (if it is less than one) which the length of the chargeable period bears to the part unexpired, at the date of the making of the rebate, of the period of 25 years beginning with the time when the building or structure was first used.]

(3) Where the interest in a building or structure which is the relevant interest in relation to any expenditure is sold and the sale is an event to which section 4(1) applies, then (subject to any further adjustment under this subsection on a later sale [F4 or under subsection (2B) or (2C) above]) the writing-down allowance for any chargeable period, if that chargeable period F1 ... ends after the time of the sale, shall be the residue F5 . . . of that expenditure immediately after the sale, reduced in the proportion (if it is less than one) which the length of the chargeable period bears to the part unexpired at the date of the sale of the period of 25 years or, where the expenditure was incurred before 6th November 1962, 50 years beginning with the time when the building or structure was first used.

(4) Notwithstanding anything in subsections (1) to (3) above, in no case shall the amount of a writing-down allowance made to a person for any chargeable period in respect of any expenditure exceed what, apart from the writing off falling to be made by reason of the making of that allowance, would be the residue of that expenditure at the end of that chargeable period F1 ... .

F6 [(5) For the purposes of this section, a person entitled to [F7 a highway concession] in respect of a road shall be treated as having an interest in the road.]

Textual Amendments

F1 Words in Act repealed (with effect in accordance with s. 211(2) of the amending Act) by Finance Act 1994 (c. 9), s. 213(1), Sch. 26 Pt. 5(24)

F2 Words in s. 3(2) inserted (with effect in accordance with s. 211(2) of the amending Act) by Finance Act 1994 (c. 9), s. 213(2)

F3 S. 3(2A)-(2C) 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. I para. 3(1).

F4 Words in s. 3(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. I para. 3(2).

F5 Words in s. 3(3) repealed (for any chargeable period or its basis period ending on or after 06.04.1990) by Finance Act 1991 (c. 31), s. 123, Sch. 19 Pt.V Note 11.

F6 S. 3(5) inserted (for any chargeable period or its basis period ending on or after 06.04.1991) by Finance Act 1991 (c. 31), s. 60(3)(10).

F7 Words in s. 3(5) substituted (with effect in accordance with s. 99(10) of the amending Act) by Finance Act 1995 (c. 4), s. 99(2)

Modifications etc. (not altering text)

C1 S. 3: power to modify conferred (8.11.1995) by Atomic Energy Authority Act 1995 (c. 37), Sch. 3 para. 15

4 Balancing allowances and balancing charges. U.K.

(1) Subject to section 5, where any capital expenditure has been incurred on the construction of a building or structure, and any of the following events occurs while the building is an industrial building or structure or after it has ceased to be one, that is to say—

(a) the relevant interest in the building or structure is sold, or

(b) that interest, being an interest depending on the duration of a foreign concession, comes to an end on the coming to an end of that concession, or

(c) that interest, being a leasehold interest, comes to an end otherwise than on the person entitled thereto acquiring the interest which is reversionary thereon, or

(d) the building or structure is demolished or destroyed or, without being demolished or destroyed, ceases altogether to be used,[F8 or

[F9 (da) that interest, being a highway concession, is brought to or comes to an end, or]

[F10 (dd) any capital value is realised (within the meaning of section 4A), or]

(e) an additional VAT rebate in respect of any of the capital expenditure is made to the person entitled to the relevant interest,]

an allowance or charge (“a balancing allowance" or “a balancing charge") shall, in the circumstances mentioned in this section and subject to [F11 subsections (2) and (9A)] below, be made to, or, as the case may be, on, the person entitled to the relevant interest immediately before that event occurs, for the chargeable period related to that event.

(2) No balancing allowance or balancing charge shall be made by reason of any event occurring more than 25 years (or, where the expenditure was incurred before 6th November 1962, 50 years) after the building or structure was first used and where two or more events [F12 falling within paragraphs (a) to (d) of subsection (1) above] occur during a period when the building or structure is not an industrial building or structure no balancing allowance or balancing charge shall be made on the occurrence of any of those events except the first.

[F13 (2AA) No balancing allowance or balancing charge shall be made by reason of an event falling within paragraph (da) of subsection (1) above if the period for which the concession was granted is deemed for the purposes of this subsection to be extended to include any period after the end of the concession; and for the purposes of this subsection where in the case of any highway concession that period is or is deemed to be different in relation to different parts of the road in respect of which it has been granted such apportionment shall be made for the purposes of this subsection as may be just and reasonable.

(2AB) Where a highway concession in respect of any road (“the prior concession”) is brought to or comes to an end in circumstances in which—

(a) the person entitled to that concession is afforded (whether or not in pursuance of any legally enforceable arrangements), and takes advantage of, an opportunity to be granted a renewal of the concession, on the same or modified terms, in respect of the whole or any part of that road, or

(b) that person, or a person who is connected with that person within the terms of section 839 of the principal Act, is so afforded, and takes advantage of, an opportunity to be granted a new concession, on the same or modified terms, in respect of, or of a road that includes, the whole or any part of that road,

then to the extent that the prior concession and the renewed or new concession relate to the same road, the period of the prior concession shall be deemed, for the purposes of subsection (2AA) above, to have been extended or further extended for the period of the renewed or new concession and any question for the purposes of this Part as to what constitutes the relevant interest at any time after the renewal, or (as the case may be) the grant of the new concession, shall be determined on the assumption that the renewed or new concession is a continuation of the prior concession.]

F14 [(2A) No balancing allowance shall be made by reason of an event falling within paragraph (e) of subsection (1) above; and no balancing charge shall be made by reason of such an event unless—

(a) the amount of the additional VAT rebate exceeds the residue of expenditure immediately before the making of that rebate, or

(b) there is no such residue,

and in any such case a balancing charge shall be made on an amount equal to that by which the rebate exceeds the residue of expenditure immediately before the making of the rebate or, where there is no such residue, to the amount of the rebate.]

(3) Where there are no sale, insurance, salvage or compensation moneys, or where the residue of the expenditure immediately before the event exceeds those moneys, a balancing allowance shall be made the amount of which shall be the amount of that residue or, as the case may be, of the excess of the residue over those moneys.

(4) If the sale, insurance, salvage or compensation moneys exceed the residue, if any, of the expenditure immediately before the event, a balancing charge shall be made, and the amount on which it is made shall be an amount equal to the excess or, where the residue is nil, to those moneys.

(5) If for any part of the relevant period the building or structure was neither an industrial building or structure nor used for scientific research, subsections (6) to (9) below shall have effect instead of subsections (3) and (4) above.

(6) Subject to subsection (8) below, where the sale, insurance, salvage or compensation moneys are not less than the capital expenditure, a balancing charge shall be made and the amount on which it is made shall be an amount equal to the allowances given.

(7) Subject to subsection (8) below, where there are no sale, insurance, salvage or compensation moneys or where those moneys are less than the capital expenditure, then—

(a) if the adjusted net cost of the building or structure exceeds the allowances given, a balancing allowance shall be made the amount of which shall be an amount equal to the excess;

(b) if the adjusted net cost of the building or structure is less than the allowances given, a balancing charge shall be made and the amount on which it is made shall be an amount equal to the shortfall.

(8) No balancing charge or allowance shall be made under subsection (6) or (7) above on the occasion of a sale if by virtue of section 158 the building or structure is treated as having been sold for a sum equal to the residue of the expenditure on its construction immediately before the sale.

(9) In subsections (5) to (7) above and this subsection—

• “the relevant period” means the period beginning at the time when the building or structure was first used for any purpose and ending with the event giving rise to the balancing allowance or balancing charge except that where there has been a sale of the building or structure after that time and before that event the relevant period shall begin on the day following that sale or, if there has been more than one such sale, the last such sale;

• “the capital expenditure” means—

  (a)

  where paragraph (b) of this definition does not apply, the capital expenditure incurred (or by virtue of section 10(1) [F15 10A [F16 10B or 10C]]deemed to have been occurred) on the construction of the building or structure [F17 reduced by an amount equal to that of any balancing charge made in relation to that expenditure on the occurrence of an event falling within subsection (1)(e) above;]

  (b)

  where the person to or on whom the balancing allowance or charge falls to be made is not the person who incurred (or is deemed to have incurred) that expenditure, the residue of that expenditure at the beginning of the relevant period,

  together (in either case) with any amount to be added to the residue of that expenditure by virtue of section 8(12);

• “the allowances given” means the allowances referred to in subsection (10) below;

• “the adjusted net cost” means—

  (a)

  where there are no sale, insurance, salvage or compensation moneys, the capital expenditure;

  (b)

  where those moneys are less than that expenditure, the amount by which they are less,

  reduced (in either case) in the proportion that the part, or the aggregate of the parts, of the relevant period for which the building or structure was an industrial building or structure or used for scientific research bears to the whole of that period;

• “scientific research” has the same meaning as in Part VII.

[F18 (9A) No balancing allowance shall be made by reason of any event falling within subsection (1)(dd) above; and (subject to that) in relation to such an event—

(a) this Part and (so far as relating to it) Part VIII shall have effect as if references to sale, insurance, salvage or compensation moneys were references to the capital value realised, and

(b) subsections (5) to (7) and (9) above shall have effect as if immediately after the event the capital expenditure were reduced by the amount of the capital value realised]

(10) Notwithstanding anything in subsections (1) to (9) above, in no case shall the amount on which a balancing charge is made on a person in respect of any expenditure on the construction of a building or structure exceed the amount of the initial allowance, if any, made to him in respect of that expenditure together with the amount of any writing-down allowances or scientific research allowances in respect of that expenditure, and any relevant mills, factories or exceptional depreciation allowances in respect of that building or structure, made to him for chargeable periods which end on or before the date of the event giving rise to the charge F1 ... [F19 reduced by the amounts (if any) on which balancing charges in respect of the expenditure have been made on him for any such chargeable periods].

(11) Where—

(a) before 6th April 1990, a woman was entitled to the relevant interest in relation to expenditure incurred on the construction of a building or structure (whether she was entitled to it when the expenditure was incurred or acquired it afterwards);

(b) for a chargeable period ending before that date, an allowance such as is mentioned in subsection (10) above was made to the woman’s husband in respect of her relevant interest; and

(c) on or after that date there occurs an event such as is mentioned in subsection (1) above in respect of which the woman is entitled to all or part of any sale, insurance, salvage or compensation moneys,

the allowance shall be treated for the purposes of subsection (10) above as having been made to the woman.

(12) In subsection (10) above “relevant mills, factories or exceptional depreciation allowances”, in relation to any building or structure, means —

(a) any allowance granted for a year of assessment under section 15 of the M1 Finance Act 1937 in respect of it or premises of which it forms part, including any amount which under that section was to be allowed as a deduction in computing profits or gains for that year of assessment, (but where such an allowance was granted in respect of premises which include several buildings or structures, the whole amount of that allowance shall be apportioned between all the buildings and structures and only that part of the allowance which is apportioned to the building or structure in question shall be taken into account), and

(b) any allowance made under section 19 of the M2 Finance Act 1941 in respect of that building or so much of any such allowance granted in respect of any building of which it forms part as is properly attributable to it.

Textual Amendments

F1 Words in Act repealed (with effect in accordance with s. 211(2) of the amending Act) by Finance Act 1994 (c. 9), s. 213(1), Sch. 26 Pt. 5(24)

F8 S. 4(1)(e) and word preceding it 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. I para. 4(1).

F9 S. 4(1)(da) inserted (with effect in accordance with s. 99(10) of the amending Act) by Finance Act 1995 (c. 4), s. 99(3)

F10 S. 4(1)(dd) inserted (3.5.1994) by Finance Act 1994 (c. 9), s. 120(2)(a) (with s. 120(7))

F11 Words in s. 4(1) substituted (3.5.1994) by Finance Act 1994 (c. 9), s. 120(2)(a) (with s. 120(7))

F12 Words in s. 4(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. I para. 4(2).

F13 S. 4(2AA)(2AB) inserted (with effect in accordance with s. 99(10) of the amending Act) by Finance Act 1995 (c. 4), s. 99(4)

F14 S. 4(2A) 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. I para. 4(3).

F15 Words in s. 4(9) inserted (16.7.1992) by Finance (No. 2) Act 1992 (c. 48), s. 70, Sch. 13 paras 13, 17

F16 Words in s. 4(9)(a) definition of the “capital expenditure” substituted (27.7.1993 with effect as mentioned in s. 113(7) of the amending Act) by 1993 c. 34, s. 113(2)(7)

F17 Words in s. 4(9) added (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. I para. 4(4).

F18 S. 4(9A) inserted (3.5.1994) by Finance Act 1994 (c. 9), s. 120(2)(b) (with s. 120(7))

F19 Words in s. 4(10) added (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. I para. 4(5).

Marginal Citations

M1 1937 c. 54.

M2 1941 c. 30.

[F20 4A Realisation of capital value. U.K.

(1) Where any capital expenditure has been incurred on the construction of a building or structure and, while the building or structure is an industrial building or structure or after it has ceased to be one—

(a) an amount of capital value is paid which is attributable to an interest in land (the “subordinate interest”) to which the relevant interest in the building or structure is or will be subject, and

(b) the payment is made not more than seven years after the agreement relating to the capital expenditure was entered into or (if the agreement was conditional) the time when the agreement became unconditional,

capital value of that amount is realised for the purposes of this Part on making the payment.

(2) For the purposes of this section, capital value is attributable to the subordinate interest if—

(a) it is paid in consideration of the grant of the subordinate interest,

(b) it is paid in lieu of any rent payable by the person entitled to the subordinate interest or paid in consideration of the assignment of such rent, or

(c) it is paid in consideration of the surrender of the subordinate interest or the variation or waiver of any of the terms on which it was granted.

(3) For the purposes of this section, “capital value”—

(a) means any capital sum and includes what would have been a capital sum if it had taken the form of a money payment, and “payment” and “paid” shall be interpreted accordingly, but

(b) does not include so much of any sum as corresponds to any amount of rent or profits falling to be computed by reference to that sum under section 34 of the principal Act (premium, etc. treated as rent or Schedule D profits).

(4) Where—

(a) no premium is given in consideration of the grant of the subordinate interest or any premium given is less than the amount which would have been given by way of premium if the transaction had been at arm’s length, and

(b) no commercial rent is payable in respect of the subordinate interest,

subsection (2) above shall have effect as if the amount referred to in paragraph (a) above (and not any premium actually given) were paid on and in consideration of the grant of the interest.

(5) Where—

(a) any rent payable in respect of the subordinate interest is assigned, the subordinate interest is surrendered or any of the terms on which the subordinate interest was granted are varied or waived, but

(b) no value is given in consideration of the event concerned, or any value given in consideration of the event concerned is less than the amount that would have been given if the transaction had been at arm’s length,

subsection (2) above shall have effect as if that amount (and not any value actually given) were paid on and in consideration of the event concerned.

(6) Where any value given in lieu of any rent payable by the person entitled to the subordinate interest is less than the amount that would have been given if the transaction had been at arm’s length, subsection (2) above shall have effect as if that amount (and not any value actually given) had been paid.

(7) This section shall apply with the omission of subsection (1)(b) above in any case where—

(a) arrangements under which the person entitled to the relevant interest acquired it include provision in respect of the subsequent sale of the relevant interest, the subsequent grant out of the relevant interest of an interest in land or any other event on which capital value attributable to the subordinate interest would be, or be treated as, paid, and

(b) either the provision concerned requires such a sale, grant or other event to occur or such a sale, grant or other event is substantially more likely to occur than if the provision had not been made;

and the reference to arrangements in paragraph (a) above includes any arrangements made in connection with the acquisition of the relevant interest.

(8) This section does not apply to the grant of any interest in land to which an election under section 11 applies.

(9) In this section “interest in land” means—

(a) a leasehold estate in the land (whether in the nature of a head-lease, sub-lease or under-lease),

(b) an easement or servitude, and

(c) a licence to occupy land;

and references to granting an interest in land include agreeing to grant any interest falling within paragraphs (a) to (c) above.

(10) In this section “commercial rent” means such rent as may reasonably be expected to have been required in respect of the subordinate interest (having regard to any premium given in consideration of the grant of the interest) if the transaction had been at arm’s length.

(11) For the purposes of this section, where—

(a) an agreement is made to pay in respect of any event an amount of capital value which would be attributable to the subordinate interest, and

(b) the agreement is made or (if the agreement is conditional) becomes unconditional before the expiry of the period of seven years referred to in subsection (1)(b) above, but the event occurs, or any payment in consideration of the event is made, afterwards,

the event or payment shall be treated as occurring or made before the expiry of the period.

(12) For the purposes of this section, an agreement relates to any capital expenditure referred to in subsection (1) above if—

(a) it is the agreement under which the expenditure was incurred, or

(b) where the expenditure is deemed for the purposes of sections 1 to 8 to have been incurred by a person who acquired the relevant interest, it is the agreement under which he acquired the relevant interest.

(13) In the application of this section to Scotland—

(a) references to assignment shall be read as references to assignation, and

(b) references to a leasehold estate in land shall be read as references to a lease of land.]

Textual Amendments

F20 S. 4A inserted (3.5.1994) by Finance Act 1994 (c. 9), s. 120(3) (with s. 120(7))

5 Restriction of balancing allowances on sale of industrial buildings or structures. U.K.

(1) This section has effect where—

(a) the relevant interest in a building or structure is sold subject to a subordinate interest; and

(b) a balancing allowance would, apart from this section, fall to be made to the person who is entitled to the relevant interest immediately before the sale (“the relevant person") under section 4 by virtue of the sale; and

(c) either—

(i) the relevant person, the person to whom the relevant interest is sold and the grantee of the subordinate interest, or any two of them, are connected with each other within the terms of section 839 of the principal Act, or

(ii) it appears with respect to the sale or the grant of the subordinate interest, or with respect to transactions including the sale or grant, that the sole or main benefit which, but for this section, might have been expected to accrue to the parties or any of them was the obtaining of an allowance under this Part.

(2) For the purposes of section 4 the net proceeds to the relevant person of the sale—

(a) shall be taken to be increased by an amount equal to any premium receivable by him for the grant of the subordinate interest; and

(b) where no rent, or no commercial rent, is payable in respect of the subordinate interest, shall be taken to be what those proceeds would have been if a commercial rent had been payable and the relevant interest had been sold in the open market (increased by any amount to be added under paragraph (a) above),

but the net proceeds of sale shall not by virtue of this subsection be taken to be greater than such amount as will secure that no balancing allowance falls to be made.

[F21 (2A) Where the net proceeds to the relevant person of the sale fall to be increased or determined under subsection (2) above, those proceeds as so increased or determined shall be taken to be reduced by the amount of any capital value realised before the sale]

(3) Where subsection (2) above operates in relation to a sale to deny or reduce a balancing allowance in respect of any expenditure, the residue of that expenditure immediately after the sale shall be calculated for the purposes of this Part as if that balancing allowance had been made or, as the case may be, had not been reduced.

(4) In this section—

• “subordinate interest” means any interest in or right over the building or structure in question (whether granted by the relevant person or by somebody else);

• “premium” includes any capital consideration except so much of any sum as corresponds to any amount of rent or profits falling to be computed by reference to that sum under section 34 of the principal Act (premium treated as rent or Schedule D profits);

• “capital consideration” means consideration which consists of a capital sum or would be a capital sum if it had taken the form of a money payment;

• “rent” includes any consideration which is not capital consideration;

• “commercial rent” means such rent as may reasonably be expected to have been required in respect of the subordinate interest in question (having regard to any premium payable for the grant of the interest) if the transaction had been at arm’s length.

(5) Where the terms on which a subordinate interest is granted are varied before the sale of the relevant interest any capital consideration for the variation shall be treated for the purposes of this section as a premium for the grant of the interest, and the question whether any and, if so, what rent is payable in respect of the interest shall be determined by reference to the terms as in force immediately before the sale.

Textual Amendments

F21 S. 5(2A) inserted (3.5.1994) by Finance Act 1994 (c. 9), s. 120(4) (with s. 120(7))

6 Buildings and structures (including hotels) in enterprise zones. U.K.

(1) This Chapter and Chapter III—

(a) shall apply with the modifications specified below in relation to capital expenditure on the construction of an industrial building or structure; and

(b) shall, as so modified, apply also in relation to capital expenditure on the construction of a qualifying hotel or of a commercial building or structure as if it were an industrial building or structure,

in any case where the expenditure is incurred, or is incurred under a contract entered into, at a time when the site of the industrial building or structure, the qualifying hotel or the commercial building or structure is in an enterprise zone, being a time not more than 10 years after the site was first included in the zone.

(2) Section 3(2) shall have effect with the substitution for the references to one-twentyfifth of references to one-quarter.

(3) Section 7 shall not apply to expenditure to which this Chapter applies by virtue of this section.

(4) For the purposes of sections 3(1)(b), 4(1) [F22 4A(1)], 8(3), (4) and (7) and 15(1) and (2) a building or structure of any description (including a qualifying hotel) in relation to which this Chapter has effect in accordance with subsection (1) above shall be regarded as continuing to be, or to be used as, a building or structure of that description notwithstanding that it has become a building or structure of another such description.

[F23 (4A) This section shall have effect subject to section 17A.]

F24 (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F22 Word in s. 6(4) inserted (3.5.1994) by Finance Act 1994 (c. 9), s. 120(5) (with s. 120(7))

F23 S. 6(4A) inserted (16.7.1992) by Finance (No. 2) Act 1992 (c. 48), s. 70, Sch. 13 para.12.

F24 S. 6(5) repealed (16.7.1992) by Finance (No. 2) Act 1992 (c. 48), ss. 70, 82, Sch. 13 paras. 4, 14, Sch. 18 Pt.VII(9).

7 Other hotels. U.K.

(1) Subject to the following provisions of this section, [F25 this Chapter and Chapter III as it applies for the purposes of this Chapter] shall apply in relation to a qualifying hotel as if it were an industrial building or structure, with the following modifications—

(a) where, after a building has ceased to be a qualifying hotel otherwise than on the occurrence of an event to which section 4(1) applies, a period of two years elapses in which it is not a qualifying hotel and without the occurrence of any such event, this Chapter and Chapter III shall have effect as if—

(i) the relevant interest in the building had been sold at the end of that period; and

(ii) the net proceeds of the sale were equal to the price which that interest would then have fetched if sold in the open market;

(b) references in this Chapter and Chapter III to expenditure on the construction of a building or structure shall not include references to expenditure incurred in taking any such steps as are mentioned in section 69.

(2) Subsection (1)(a) above has effect subject to section 15(1); but a building shall not by virtue of that section be deemed to continue to be a qualifying hotel for more than two years after the end of the chargeable period F1 ... in which it falls temporarily out of use.

(3) Subsection (1)(b) above shall not have effect in relation to any chargeable period F1 ... ending after 26th July 1989.

Textual Amendments

F1 Words in Act repealed (with effect in accordance with s. 211(2) of the amending Act) by Finance Act 1994 (c. 9), s. 213(1), Sch. 26 Pt. 5(24)

F25 Words substituted by Finance Act 1990 (c. 29), s. 88, Sch. 13 para. 1(2)(3)