Capital Allowances Act 1990 (repealed)

35 Contributions to expenditure, and hiring of cars. U.K.

(1) Where capital expenditure exceeding [F1 £12,000] is incurred on the provision of a motor car and, by virtue of section 154, writing-down allowances may be made to a person as if a contribution made by him to the expenditure had been expenditure on the provision of a motor car for the purposes of a trade, the amount of the allowance to be made for any chargeable period—

(a) shall be determined as if the contribution had been expenditure on the provision of the motor car for the purposes of a trade carried on by that person separately from any other trade carried on by him, and

(b) shall not exceed an amount bearing to [F1 £3,000] the same proportion as that borne by the contribution to the capital expenditure actually incurred on the provision of the motor car [F2 or, if the chargeable period is a period of less or more than a year, that amount proportionately reduced or, as the case may require, increased].

(2) Where, apart from this subsection, the amount of any expenditure on the hiring of a motor car the retail price of which when new exceeds [F1 £12,000] would be allowed to be deducted in computing for the purposes of tax the profits or gains of any trade, that amount shall be reduced in the proportion which [F1 £12,000], together with one half of the excess, bears to that retail price [F3 ; but this subsection shall have effect subject to subsection (3) below.]

F4 [(3) Subsection (2) above shall not apply where the hiring is under a hire-purchase agreement under which there is an option to purchase exercisable on the payment of a sum equal to not more than 1 per cent. of the retail price of the motor car when new.

(4) In subsection (3) above “hire-purchase agreement” has the meaning given by section 784(6) of the principal Act.]

Textual Amendments

F1 Words in s. 35(1)(2) substituted (16.7.1992) by Finance (No. 2) Act 1992 (c. 48), s. 71(4)(5)(7)(8).

F2 Words in s. 35(1)(b) substituted (with effect in accordance with s. 211(2) of the amending Act) by Finance Act 1994 (c. 9), s. 213(6)

F3 Words in s. 35(2) inserted (for any chargeable period or its basis period ending on or after 25.07.1991) by Finance Act 1991 (c. 31), s. 61(2)(4).

F4 S. 35(3)(4) inserted (for any chargeable period or its basis period ending on or after 25.07.1991) by Finance Act 1991 (c. 31), s. 61(3)(4).