[F162B Treatment of post-cessation abandonment expenditure related to offshore machinery or plant.U.K.
(1)Subsection (2) below applies in any case where—
(a)a person (in this section referred to as “the former trader") ceases to carry on a ring fence trade; and
(b)after 30th June 1991 and within the period of three years immediately following the last day on which he carried on that trade, the former trader incurs expenditure (in this section referred to as “post-cessation expenditure") on the demolition of machinery or plant which falls within section 62A(1)(c); and
(c)the post-cessation expenditure would have been abandonment expenditure for the purposes of section 62A if the demolition had been carried out and the expenditure incurred before the cessation of the ring fence trade; and
(d)apart from this section, the post-cessation expenditure would not be deductible in computing the income of the former trader for any purpose of corporation tax or income tax.
(2)Where this subsection applies, the qualifying expenditure of the former trader for the chargeable period related to the cessation of his ring fence trade shall be treated for the purposes of sections 24 and 25 as increased by so much of the post-cessation expenditure as exceeds any moneys received in the three year period referred to in paragraph (b) of subsection (1) above for the remains of the machinery or plant referred to in that paragraph.
(3)Where subsection (2) above applies, any moneys received as mentioned in that subsection shall not constitute income of the former trader for any purpose of income tax or corporation tax.
(4)All such adjustments shall be made, whether by way of discharge or repayment of tax or otherwise, as may be required in consequence of the provisions of this section.
(5)In this section “ring fence trade” has the same meaning as in section 62A.]
Textual Amendments
F1Ss. 62A, 62B inserted by Finance Act 1990 (c. 29), s. 60