Capital Allowances Act 1990 (repealed)

[F1 33D Expenditure to which deferments attributed. U.K.

(1) Subject to the following provisions of this section, expenditure is expenditure on new shipping for the purposes of sections 33A to 33C in so far as it is both—

(a) capital expenditure incurred on the provision, wholly and exclusively for the purposes of [F2 a trade carried on by the person who incurs that expenditure], of a ship which it appears—

(i) will be brought into use for the purposes of that trade as a qualifying ship, and

(ii) will continue to be a qualifying ship throughout a period of at least three years after that; and

(b) expenditure falling, by virtue of section 31(2), to be taken into account for the purposes of sections 24, 25 and 26, in determining qualifying expenditure, as an amount of expenditure incurred by [F3 that person] wholly and exclusively for the purposes of a single ship trade.

(2) Expenditure on the provision of a ship shall not be, and shall be deemed never to have been, expenditure on new shipping if the ship—

(a) is brought into use for the purposes of any trade of [F4 the person who incurred the expenditure] or (without having been so brought into use) for the purposes of any trade of a person connected with him;

(b) there is a time after it is first so brought into use when that ship is not a qualifying ship; and

(c) that time is before whichever is the earlier of—

(i) the end of the period of three years beginning with the time when it is first so brought into use, and

(ii) the first occasion after the beginning of that period when neither [F5 the person who incurred the expenditure] nor any person connected with him is a person to whom the ship belongs.

[F6 (2A) Subject to subsection (2B) below, expenditure incurred by a qualifying person other than the shipowner on the provision of a ship shall not be, and shall be deemed never to have been, expenditure on new shipping if—

(a) at any time after the time when the ship first belongs to that person in consequence of that expenditure, it ceases to belong to that person without having been brought into use for the purposes of a trade of that person;

(b) the ship is brought into use for the purposes of a trade of that person and an event falling within section 24(6)(c) occurs with respect to the ship before the end of the period of three years beginning with the time when it is first so brought into use; or

(c) there is a time falling—

(i) after the expenditure is incurred, and

(ii) where the ship is brought into use for the purposes of a trade of that person, before the end of the period of three years beginning with the time when it is first so brought into use,

when the shipowner and that person do not fall to be treated as members of the same group of companies for the purposes of Chapter IV of Part X of the principal Act (group relief).

(2B) Subsection (2A) above shall not apply by virtue of paragraph (a) or (b) of that subsection in any case if the event by virtue of which the case falls within that paragraph is, or is the result of—

(a) the total loss of the ship; or

(b) damage to the ship that puts it in a condition in which it is impossible, or not commercially worthwhile, for the repair required for restoring it to its previous use to be undertaken;

and that subsection shall have effect, where anything falling within paragraph (a) or (b) above occurs, as if times falling after the occurrence of the total loss or, as the case may be, after the occurrence of the damage were to be disregarded for the purposes of paragraph (c) of that subsection.]

(3) Where—

(a) a notice under section 33(1) or (4) has the effect, in relation to any expenditure which satisfies the conditions in subsection (1)(a) and (b) above, of requiring any of that expenditure to be attributed for the purposes of sections 24, 25 and 26 to a trade which is not a single ship trade, or

(b) section 42 has effect with respect to expenditure on the provision of a ship in a case where the expenditure would have fallen to be taken into account as mentioned in subsection (1)(b) above if the ship had not been leased as mentioned in section 42(1),

the expenditure which falls to be so attributed or, as the case may be, with respect to which section 42 has effect shall not be, and shall be deemed never to have been, expenditure on new shipping.

(4) Expenditure on the provision of a ship is not expenditure on new shipping if—

(a) the ship had already belonged to [F7 the person who incurred the expenditure] at some time in the period of six years ending with the time when it first belongs to him in consequence of his incurring that expenditure;

(b) the ship has at any time in that period belonged to a person who has, at a material time, been a person connected with [F8 the person who incurred the expenditure]; or

(c) the main object, or one of the main objects, of—

(i) the transaction by which the ship was provided for the purposes of [F9 a trade carried on by the person who incurred that expenditure],

(ii) any series of transactions of which that transaction was one, or

(iii) any transaction in such a series,

was to secure the deferment of a charge under section 33A.

(5) In subsection (4)(b) above “a material time”, in relation to any expenditure, means the time when the expenditure is incurred or any earlier time in the period of six years which is applicable in the case in question for the purposes of section 33A(3)(b).

(6) An addition made under section 33A to the shipowner’s qualifying expenditure for any period shall not for the purposes of that section or section 33C be attributed to the whole or any part of any expenditure on new shipping if there is other expenditure incurred [F10 by a qualifying person] which—

(a) was incurred before that expenditure in the period of six years which is applicable, in the case of that addition, for the purposes of section 33A(3)(b), and

(b) is expenditure on new shipping or would fall to be treated as such expenditure but for any notice under section 33(1) or (4),

unless the whole amount of the other expenditure has been used for the purposes of attributions made in the case of that addition and of any other additions made under section 33A in respect of events occurring before the beginning of that period of six years.

(7) Notwithstanding any changes in the persons engaged in carrying on [F11 the shipowner’s actual trade], expenditure shall be treated for the purposes of this Chapter as incurred by the shipowner if—

(a) it is incurred [F12 for the purposes of that trade by the persons for the time being carrying it on], and

(b) the only changes in the persons so engaged, between the time when the trade was carried on by the shipowner and the time when the expenditure is incurred, are changes in respect of which that trade is to be treated by virtue of section 113(2) or 343(2) of the principal Act (continuity of trade) as not having been discontinued.

[F13 (8) For the purposes of this section a person is connected with another person at any time if, at that time—

(a) he is, within the terms of section 839 of the principal Act, connected either with that other person or with a person who is connected with that other person by virtue of paragraph (b) below; or

(b) he is carrying on a trade previously carried on by that other person in a case in which the only changes in the persons engaged in carrying on that trade between—

(i) the time when it was previously carried on by that other person, and

(ii) the time in question,

are changes in respect of which the trade is to be treated by virtue of section 113(2) or 343(2) of the principal Act as not having been discontinued;

and the persons who shall be taken for the purposes of this section, in relation to expenditure incurred by a person who is not the shipowner, to be connected at any time with the person by whom the expenditure is or has been incurred shall include every person who at that time is connected (in accordance with the preceding provisions of this subsection) with the shipowner.]]

Textual Amendments

F1 Ss. 33D, 33E inserted (with effect in accordance with s. 98(1)(2) of the amending Act) by Finance Act 1995 (c. 4), s. 96 (with s. 98(2)-(6))

F2 Words in s. 33D(1)(a) substituted (with effect in accordance with Sch. 35 para. 7(1) of the amending Act) by Finance Act 1996 (c. 8), Sch. 35 para. 4(1)(a) (with Sch. 35 para. 7(2)(3)); S.I. 1997/133, art. 2

F3 Words in s. 33D(1)(b) substituted (with effect in accordance with Sch. 35 para. 7(1) of the amending Act) by Finance Act 1996 (c. 8), Sch. 35 para. 4(1)(b) (with Sch. 35 para. 7(2)(3)); S.I. 1997/133, art. 2

F4 Words in s. 33D(2)(a) substituted (with effect in accordance with Sch. 35 para. 7(1) of the amending Act) by Finance Act 1996 (c. 8), Sch. 35 para. 4(2)(a) (with Sch. 35 para. 7(2)(3)); S.I. 1997/133, art. 2

F5 Words in s. 33D(2)(c)(ii) substituted (with effect in accordance with Sch. 35 para. 7(1) of the amending Act) by Finance Act 1996 (c. 8), Sch. 35 para. 4(2)(b) (with Sch. 35 para. 7(2)(3)); S.I. 1997/133, art. 2

F6 S. 33D(2A)(2B) inserted (with effect in accordance with Sch. 35 para. 7(1) of the amending Act) by Finance Act 1996 (c. 8), Sch. 35 para. 4(3) (with Sch. 35 para. 7(2)(3)); S.I. 1997/133, art. 2

F7 Words in s. 33D(4)(a) substituted (with effect in accordance with Sch. 35 para. 7(1) of the amending Act) by Finance Act 1996 (c. 8), Sch. 35 para. 4(4)(a) (with Sch. 35 para. 7(2)(3)); S.I. 1997/133, art. 2

F8 Words in s. 33D(4)(b) substituted (with effect in accordance with Sch. 35 para. 7(1) of the amending Act) by Finance Act 1996 (c. 8), Sch. 35 para. 4(4)(a) (with Sch. 35 para. 7(2)(3)); S.I. 1997/133, art. 2

F9 Words in s. 33D(4)(c)(i) substituted (with effect in accordance with Sch. 35 para. 7(1) of the amending Act) by Finance Act 1996 (c. 8), Sch. 35 para. 4(4)(b) (with Sch. 35 para. 7(2)(3)); S.I. 1997/133, art. 2

F10 Words in s. 33D(6) substituted (with effect in accordance with Sch. 35 para. 7(1) of the amending Act) by Finance Act 1996 (c. 8), Sch. 35 para. 4(5) (with Sch. 35 para. 7(2)(3)); S.I. 1997/133, art. 2

F11 Words in s. 33D(7) substituted (with effect in accordance with Sch. 35 para. 7(1) of the amending Act) by Finance Act 1996 (c. 8), Sch. 35 para. 4(6)(a) (with Sch. 35 para. 7(2)(3)); S.I. 1997/133, art. 2

F12 Words in s. 33D(7)(a) substituted (with effect in accordance with Sch. 35 para. 7(1) of the amending Act) by Finance Act 1996 (c. 8), Sch. 35 para. 4(6)(b) (with Sch. 35 para. 7(2)(3)); S.I. 1997/133, art. 2

F13 S. 33D(8) substituted (with effect in accordance with Sch. 35 para. 7(1) of the amending Act) by Finance Act 1996 (c. 8), Sch. 35 para. 4(7) (with Sch. 35 para. 7(2)(3)); S.I. 1997/133, art. 2