Capital Allowances Act 2001
Part 1 Introduction
Chapter 1 Capital allowances: general
1 Capital allowances
1ACapital allowances and charges: cash basis
2 General means of giving effect to capital allowances
3 Claims for capital allowances
4 Capital expenditure
5 When capital expenditure is incurred
6 Meaning of “chargeable period”
CHAPTER 1ATrades attracting Northern Ireland rate of corporation tax
6A“NIRE company” and “SME (Northern Ireland employer) company”
6B“Northern Ireland firm” etc
6C“NI rate activity”
6D NI rate activity treated as separate trade
6EGiving effect to allowances and charges: NI rate activity cases
Chapter 2 Exclusion of double relief
7 No double allowances
8 No double relief through pooling under Part 2 (plant and machinery allowances)
9 Interaction between fixtures claims and other claims
10 Interpretation
Part 2 Plant and machinery allowances
Chapter 1 Introduction
11 General conditions as to availability of plant and machinery allowances
12 Expenditure incurred before qualifying activity carried on
13 Use for qualifying activity of plant or machinery provided for other purposes
13AUse for other purposes of plant or machinery previously used for long funding leasing
13BUse for other purposes of plant or machinery: property businesses
14 Use for qualifying activity of plant or machinery which is a gift
Chapter 2 Qualifying activities
15 Qualifying activities
16 Ordinary UK property businesses
17 UK furnished holiday lettings businesses
17AOrdinary overseas property business
17B EEA furnished holiday lettings businesses
18Managing the investments of a company with investment business
19 Special leasing of plant or machinery
20 Employments and offices
Chapter 3 Qualifying expenditure
Buildings, structures and land
21 Buildings
22 Structures, assets and works
23 Expenditure unaffected by sections 21 and 22
24 Interests in land
25 Building alterations connected with installation of plant or machinery
Demolition costs
26 Demolition costs
Expenditure on thermal insulation and personal security
27 Application of Part to thermal insulation and personal security
28 Thermal insulation of ... buildings
29 Fire safety
30 Safety at designated sports grounds
31 Safety at regulated stands at sports grounds
32 Safety at other sports grounds
33 Personal security
Expenditure on integral features
33AExpenditure on provision or replacement of integral features
33BMeaning of “replacement” in section 33A
Exclusion of certain types of expenditure
34 Expenditure by MPs and others on accommodation
34AExpenditure on plant or machinery for long funding leasing not qualifying expenditure
35 Expenditure on plant or machinery for use in dwelling-house not qualifying expenditure in certain cases
36 Restriction on qualifying expenditure in case of employment or office
37 Exclusion where sums payable in respect of depreciation
38 Production animals etc.
38ZAVehicles for which deductions allowed at fixed rate under Part 2 of ITTOIA 2005
Chapter 3AAIA qualifying expenditure
38AAIA qualifying expenditure
38BGeneral exclusions applying to section 38A
Chapter 4 First-year qualifying expenditure
General
39 First-year allowances available for certain types of qualifying expenditure only
Types of expenditure which may qualify for first-year allowances
40 Expenditure incurred for Northern Ireland purposes by small or medium-sized enterprises
41 Miscellaneous exclusions from section 40 (expenditure for Northern Ireland purposes etc.)
42 Exclusion of plant or machinery partly for use outside Northern Ireland
43 Effect of plant or machinery subsequently being primarily for use outside Northern Ireland
44 Expenditure incurred by small or medium-sized enterprises
45 ICT expenditure incurred by small enterprises
45A Expenditure on energy-saving plant or machinery
45AASection 45A exclusion: feed-in tariffs and renewable heat incentives
45B Certification of energy-saving plant and machinery
45C Energy-saving components of plant or machinery
45D Expenditure on cars with low carbon dioxide emissions
45DAExpenditure on zero-emission goods vehicles
45DBExclusions from allowances under section 45DA
45E Expenditure on plant or machinery for gas refuelling station
45EAExpenditure on plant or machinery for electric vehicle charging point
45F Expenditure on plant and machinery for use wholly in a ring fence trade
45G Plant or machinery used for less than five years in a ring fence trade
45HExpenditure on environmentally beneficial plant or machinery
45ICertification of environmentally beneficial plant and machinery
45JEnvironmentally beneficial components of plant or machinery
45KExpenditure on plant and machinery for use in designated assisted areas
45LExclusion of plant or machinery partly for use outside designated assisted areas
45MExclusions from allowances under section 45K
45NEffect of plant or machinery subsequently being primarily for use outside designated assisted areas
46 General exclusions ...
Expenditure of small or medium-sized enterprises
47 Expenditure of small or medium-sized enterprises: companies
48 Expenditure of small or medium-sized enterprises: businesses
49 Whether company is a member of a large or medium-sized group
Supplementary
50 Time when expenditure is incurred
51 Disclosure of information between UK tax authorities
Chapter 5 Allowances and charges
Annual investment allowance
51AEntitlement to annual investment allowance
51BFirst restriction: companies
51CSecond restriction: groups of companies
51DThird restriction: groups of companies under common control
51EFourth restriction: other companies under common control
51FCompanies and groups: meaning of “control”
51GCompanies and groups: meaning of “related”
51HFifth restriction: qualifying activities under common control
51IQualifying activities: meaning of control
51JQualifying activity: meaning of “related”
51JASixth restriction: allocation where profits chargeable at NI rate
51KOperation of annual investment allowance where restrictions apply
51LSpecial provision for short chargeable periods
51MSpecial provision for long chargeable periods
51NSpecial provision for long chargeable periods: supplementary
First-year allowances
52 First-year allowances
Prevention of double relief
52APrevention of double relief
Pooling
53 Pooling of qualifying expenditure
54 The different kinds of pools
Writing-down and balancing allowances and balancing charges
55 Determination of entitlement or liability
56 Amount of allowances and charges
56AWriting-down allowances for small pools
Available qualifying expenditure
57 Available qualifying expenditure
58 Initial allocation of qualifying expenditure to pools
59 Unrelieved qualifying expenditure
Disposal events and disposal values: general
60 Meaning of “disposal receipt” and “disposal event”
61 Disposal events and disposal values
62 General limit on amount of disposal value
62ACases in which disposal value is transition value
63 Cases in which disposal value is nil
64 Case in which no disposal value need be brought into account
64ALeased assets: arrangements reducing disposal value of asset
The final chargeable period
65 The final chargeable period
List of provisions outside this Chapter about disposal values
66 List of provisions outside this Chapter about disposal values
Application of Chapter to person leaving cash basis
66APersons leaving cash basis
Effect of changes in Northern Ireland status of SME company or SME partnership
66B SME company entering NI corporation tax regime
66C SME partnership entering NI corporation tax regime
66D SME company leaving NI corporation tax regime
66E SME partnership leaving NI corporation tax regime
Chapter 6 Hire-purchase etc. and plant or machinery provided by lessee
Hire-purchase and similar contracts
67 Plant or machinery treated as owned by person entitled to benefit of contract, etc.
68 Disposal value on cessation of notional ownership
69 Hire-purchase etc. and fixtures
Plant or machinery provided by lessee
70 Plant or machinery provided by lessee
Lessees under long funding leases
70AEntitlement to capital allowances
70BLong funding operating lease: amount of capital expenditure
70CLong funding finance lease: amount of capital expenditure
70DLong funding finance lease: additional expenditure: allowances for lessee
70DATransfer and long funding leaseback: restrictions on lessee's allowances
70EDisposal events and disposal values
Chapter 6AInterpretation of provisions about long funding leases
Introductory
70FIntroductory
Meaning of “long funding lease” etc
70G“Long funding lease”
70HLessee: requirement for tax return treating lease as long funding lease
70I“Short lease”
70J“Funding lease”
Meaning of “plant or machinery lease”
70K“Plant or machinery lease”
70LPlant or machinery leased with other assets: separate derived leases
70MDerived leases of plant or machinery: term and rentals
The tests for being a funding lease
70NThe finance lease test
70OThe lease payments test
70PThe useful economic life test
Leases excluded by right of lessor etc to claim capital allowances
70QLeases excluded by right of lessor etc to claim capital allowances
Excluded leases of background plant or machinery for a building
70RExcluded leases of background plant or machinery for a building
70SThe disqualifications
70TOrders relating to background plant or machinery for a building
Exclusion for certain plant or machinery leased with land
70UPlant or machinery leased with land: low percentage value
Avoidance
70VTax avoidance involving international leasing
Transfers, assignments, novations, leaseback, variations etc
70WTransfers, assignments etc by lessor
70XTransfers, assignments etc by lessee
70YSale and leaseback, lease and leaseback etc: lessors
70YAChange in accountancy classification of long funding lease
70YBLong funding operating lease: extension of term of lease
70YCExtension of term of lease that is not a long funding lease
70YDIncrease in proportion of residual amount guaranteed: review of status
Interpretation
70YE“Minimum lease payments”
70YFThe “term” of a lease
70YG“Termination amount”
70YH“Termination value”
70YIGeneral definitions
70YJPower to vary the meaning of certain expressions
Chapter 7 Computer software
71 Software and rights to software
72 Disposal values
73 Limit on disposal values
Chapter 8 Cars, etc.
Cars above the cost threshold
74 Single asset pool
75 General limit on amount of writing-down allowance
76 Limit where part of expenditure met by another person
77 Car used partly for purposes other than those of qualifying activity
78 Effect of partial depreciation subsidy
79 Cases where Chapter 17 (anti-avoidance) applies
Vehicles provided for purposes of employment or office
80Vehicles provided for purposes of employment or office
Interpretation
81 Extended meaning of “car”
82 Qualifying hire cars
Chapter 9 Short-life assets
83 Meaning of “short-life asset”
84 Cases in which short-life asset treatment is ruled out
85 Election for short-life asset treatment: procedure
86 Short-life asset pool
87 Short-life assets provided for leasing
88 Sales at under-value
89 Disposal to connected person
Chapter 10 Long-life assets
Long-life asset expenditure
90 Long-life asset expenditure
91 Meaning of “long-life asset”
92 Application of Chapter to part of expenditure
Expenditure excluded from being long-life asset expenditure
93 Fixtures etc.
94 Ships
95 Railway assets
96 Cars
97 Expenditure within the relevant monetary limit: general
98 Expenditure to which the monetary limits apply
99 The monetary limit
100 Exceeding the monetary limit
Rules applying to long-life asset expenditure
101 Allocation of long-life asset expenditure to pool
102Writing-down allowance in respect of long-life asset expenditure
Anti-avoidance provisions
103 Later claims
104 Disposal value of long-life assets
Chapter 10ASpecial rate expenditure
Special rate expenditure
104ASpecial rate expenditure
104AAMeaning of “main rate car”
104BApplication of Chapter to part of expenditure
Rules applying to special rate expenditure
104CSpecial rate pool
104DWriting-down allowances at 6% or 10%
104EDisposal value of special rate assets
104FSpecial rate cars: discontinued activity continued by relevant company
104GDisposal events in respect of cushion gas
Chapter 11 Overseas leasing
Basic terms
105“Leasing”, “overseas leasing” etc.
106 The designated period
Certain expenditure to be pooled
107 The overseas leasing pool
108 Effect of disposal to connected person on overseas leasing pool
Allowances reduced or, in certain cases, prohibited
109 Writing-down allowances at 10%
110 Cases where allowances are prohibited
Recovery of excess allowances
111 Excess allowances: standard recovery mechanism
112 Excess allowances: connected persons
113 Excess allowances: special provision for ships
Recovery of allowances given in cases where prohibition applies
114 Prohibited allowances: standard recovery mechanism
115 Prohibited allowances: connected persons
Application of Chapter in relation to joint lessees
116 Mitigation of regime
117 Recovery of allowances in case of joint lessees
Duties to supply information
118 Certificate relating to protected leasing
119 Notice of change of use of plant or machinery
120 Notice and joint lessees
Qualifying purposes
121 Meaning of “short-term leasing”
122 Short-term leasing by buyer, lessee, etc.
123 Ships and aircraft
124 Transport containers
125 Other qualifying purposes
Minor definitions
126 Minor definitions
Chapter 12 Ships
Pooling and postponement of allowances
127 Single ship pool
128 Expenditure which is not to be allocated to single ship pool
129 Election to use the appropriate non-ship pool
130 Notice postponing first-year or writing-down allowance
131 Effect of postponement
132 Disposal events and single ship pool
133 Ship not used
Deferment of balancing charges
134 Deferment of balancing charges: introduction
135 Claim for deferment
136 Further conditions for deferment
137 Effect of deferment
138 Limit on amount deferred
139 Amount taken into account in respect of old ship
Attribution of deferred amounts
140 Notice attributing deferred amounts to new expenditure
141 Deferred amounts attributed to earlier expenditure first
142 Variation of attribution
143 Effect of attribution
144 Amounts which cease to be attributable
145 Requirement to notify where no entitlement to defer amounts
Expenditure on new shipping
146 Basic meaning of expenditure on new shipping
147 Exclusions: ship previously owned
148 Exclusions: object to secure deferment
149 Exclusions: later events
150 Exclusions where expenditure not incurred by shipowner
Qualifying ships
151 Basic meaning of qualifying ship
152 Ships under 100 tons
153 Ships which are not qualifying ships
154 Further registration requirement
Deferment of balancing charges: supplementary provisions
155 Change in the persons carrying on the qualifying activity
156 Connected persons
Further provisions
157 Adjustment of assessments etc.
158 Members of same group
Chapter 13 Provisions affecting mining and oil industries
Expenditure connected with mineral extraction trades
159 Meaning of “mineral extraction trade” etc.
160 Expenditure treated as incurred for purposes of mineral extraction trade
161 Pre-trading expenditure on mineral exploration and access
Expenditure connected with reuse etc. of offshore oil infrastructure
161A Meaning of “offshore infrastructure”
161B Meaning of “decommissioning expenditure”
161C Expenditure related to reuse etc. qualifies for writing-down allowances
161D Exceptions to section 161C(2)
Provisions relating to ring fence trades
162 Ring fence trade a separate qualifying activity
163Meaning of “general decommissioning expenditure”
164 General decommissioning expenditure incurred before cessation of ring fence trade
165 General decommissioning expenditure after ceasing ring fence trade
Restrictions on allowances: anti-avoidance
165ADecommissioning services supplied by connected person
165BRestriction on allowance available
165CAllowance in respect of certain services related to decommissioning
165DAllowance where decommissioning undertaken for other participators in oil field
165ETransaction to obtain tax advantage
Transfers of interests in oil fields: anti-avoidance
166 Transfers of interests in oil fields: anti-avoidance
Oil production sharing contracts
167 Oil production sharing contracts
168 Expenditure on plant or machinery incurred by contractor
169 Expenditure on plant or machinery incurred by participator
170 Participator’s expenditure attributable to plant or machinery
171 Disposal values on cessation of ownership
Chapter 14 Fixtures
Introduction
172 Scope of Chapter etc.
172ALong funding leases etc: cases where this Chapter does not apply.
173 Meaning of “fixture” and “relevant land”
174 Meaning of “equipment lease” and “lease”
175 Meaning of “interest in land”, etc.
175A Meaning of “energy services agreement”
Persons who are treated as owners of fixtures
176 Person with interest in relevant land having fixture for purposes of qualifying activity
177 Equipment lessors
178 Equipment lessee has qualifying activity etc.
179 Equipment lessor has right to sever fixture that is not part of building
180 Equipment lease is part of affordable warmth programme
180A Energy services providers
181 Purchaser of land giving consideration for fixture
182 Purchaser of land discharging obligations of equipment lessee
182A Purchaser of land discharging obligations of client under energy services agreement
183 Incoming lessee where lessor entitled to allowances
184 Incoming lessee where lessor not entitled to allowances
Restrictions on amount of qualifying expenditure
185 Fixture on which a plant and machinery allowance has been claimed
186 Fixture on which an industrial buildings allowance has been made
186AFixtures on which a business premises renovation allowance has been made
187 Fixture on which a research and development allowance has been made
187AEffect of changes in ownership of a fixture
187BSection 187A: supplementary provision
Cessation of ownership of fixtures
188 Cessation of ownership when person ceases to have qualifying interest
189 Identifying the qualifying interest in special cases
190 Cessation of ownership of lessor where section 183 applies
191 Cessation of ownership on severance of fixture
192 Cessation of ownership of equipment lessor
192A Cessation of ownership of energy services provider
Acquisition of ownership of fixture when another ceases to own it
193 Acquisition of ownership by lessor or licensor on termination of lease or licence
194 Acquisition of ownership by assignee of equipment lessor
195 Acquisition of ownership by equipment lessee
195A Acquisition of ownership by assignee of energy services provider
195B Acquisition of ownership by client
Disposal values
196 Disposal values in relation to fixtures: general
197 Disposal values in avoidance cases
Election to fix apportionment
198 Election to apportion sale price on sale of qualifying interest
199 Election to apportion capital sum given by lessee on grant of lease
200 Elections under sections 198 and 199: supplementary
201 Elections under sections 198 and 199: procedure
Further provisions
202 Interpretation
203 Amendment of returns etc.
204 Appeals etc.
Chapter 15 Asset provided or used only partly for qualifying activity
205 Reduction of annual investment allowance and first-year allowances
206 Single asset pool etc.
207 Reduction of allowances and charges on expenditure in single asset pool
208 Effect of significant reduction in use for purposes of qualifying activity
208ACars: disposal value in avoidance cases
Chapter 16 Partial depreciation subsidies
209 Meaning of “partial depreciation subsidy”
210 Reduction of annual investment allowance and first-year allowances
211 Single asset pool etc.
212 Reduction of allowances and charges on expenditure in single asset pool
CHAPTER 16ZAAsset provided or used only partly for NI rate activity
212ZAApportionment of expenditure incurred partly for NI rate activity
212ZBSingle asset pool etc
212ZCAllowances and charges on expenditure in single asset pool
212ZDEffect of significant change in balance of use
212ZEApplication of Chapter to partnerships
212ZF“Main rate activity”
Chapter 16ARestrictions on allowance buying
Introduction
212AScope of Chapter
212BWhere Chapter applies
Qualifying change
212CWhen there is qualifying change in relation to C
212DGuide to sections explaining section 212C
212EPrincipal companies
212FWhen company is owned by consortium and consortium members
212GQualifying 75% subsidiaries
212HOwnership proportion
212IRelevant percentage share
Relevant excess of allowances
212JRelevant excess of allowances
212KRelevant tax written-down value
212LBalance sheet value
Limiting conditions
212LALimiting conditions
Unallowable purpose
212MUnallowable purpose
What happens when Chapter applies
212NOld and new accounting periods
212OWhen there is excess of allowances in pool: amount of excess
212PEffect of excess of allowances on pools
212QWhen there are postponed capital allowances
212RApportionment of proceeds of disposal of relevant plant and machinery
212STransactions on relevant day
CHAPTER 16BCap on first-year allowances...
212TCap on first-year allowances: zero-emission goods vehicles
212UCap on first-year allowances: expenditure on plant and machinery for use in designated assisted areas
Chapter 17Other anti-avoidance
Relevant transactions
213 Relevant transactions: sale, hire-purchase (etc.) and assignment
Restrictions on allowances
214 Connected persons
215Transactions to obtain tax advantages
216 Sale and leaseback, etc.
217 No annual investment allowance or first-year allowance for B’s expenditure
218 Restriction on B’s qualifying expenditure: section 214 or 216
218ZARestrictions on writing-down allowances: section 215
218ZBDisposal values: section 215
218AFurther restriction on annual investment allowance
Finance leases and certain operating leases
219 Meaning of “finance lease”
220 Allocation of expenditure to a chargeable period
Sale and finance leasebacks
221 Meaning of “sale and finance leaseback”
222 Disposal value restricted
223 No first-year allowance for B’s expenditure
224 Restriction on B’s qualifying expenditure
225 B’s qualifying expenditure if lessor not bearing non-compliance risk
226 Qualifying expenditure limited in subsequent transactions
Sale and leaseback: election for special treatment
227 Sale and leaseback: election for special treatment
228 Effect of election: relaxation of restriction on B’s qualifying expenditure, etc.
Finance leaseback: parties' income and profits
228AApplication of sections 228B and 228C
228BS's income or profits etc: deductions
228CS's income or profits: termination of leaseback
228DLessor’s income or profits
228ELessor’s income or profits: termination of leaseback
228FLease and finance leaseback
228GLeaseback not accounted for as finance lease in S's accounts
228HSections 228A to 228G: supplementary
228JPlant or machinery subject to further operating lease
Disposal of plant or machinery subject to lease where income retained
228KDisposal of plant or machinery subject to lease where income retained
228LDetermining the net present value of the rentals for purposes of s.228K
228MOther definitions for the purposes of s.228K
228MARestriction of qualifying expenditure
228MBCalculation of present value
228MCRental rebate
Miscellaneous and supplementary
229 Hire-purchase etc.
229ATransfer followed by hire-purchase etc: restrictions on hirer's allowances
230 Exception for manufacturers and suppliers
231 Adjustments of assessments etc.
232 Meaning of connected person
233 Additional VAT liabilities and rebates
Chapter 18 Additional VAT liabilities and rebates
Introduction
234 Introduction
Additional VAT liability
235 Additional VAT liability treated as qualifying expenditure
236 Additional VAT liability generates first-year allowance or annual investment allowance
237 Exceptions to section 236
Additional VAT rebate
238 Additional VAT rebate generates disposal value
239 Limit on disposal value where additional VAT rebate
Short-life assets: balancing allowance
240 Additional VAT liability
Anti-avoidance
241 No annual investment allowance or first-year allowance in respect of additional VAT liability
242 Restriction on B’s qualifying expenditure: general
243 Restriction on B’s qualifying expenditure: sale and finance leaseback
244 B’s qualifying expenditure if lessor not bearing non-compliance risk
245 Effect of election under section 227 on additional VAT liability
246 Miscellaneous
Chapter 19 Giving effect to allowances and charges
Trades
247 Trades
Property businesses
248 Ordinary UK property businesses
249 UK furnished holiday lettings businesses
250 Ordinary overseas property businesses
250A EEA furnished holiday lettings businesses
Activities analogous to trades
251 Professions and vocations
252 Mines, transport undertakings etc.
Companies with investment business
253Companies with investment business
Long-term business
254 Introductory
255Apportionment of allowances and charges
256 Different giving effect rules for BLAGAB
257 Supplementary
Special leasing of plant or machinery
258 Special leasing: income tax
259 Special leasing: corporation tax (general)
260 Special leasing: corporation tax (excess allowance)
261 Special leasing: long-term business
261ASpecial leasing: leasing partnerships
Employments and offices
262 Employments and offices
First-year tax credits
262AFirst-year tax credits
Chapter 20 Supplementary provisions
Co-ownership authorised contractual schemes
262AACo-ownership schemes: carrying on qualifying activity
262ABCo-ownership schemes: election
262ACCo-ownership schemes: calculation of allowance after election
262ADCo-ownership schemes: effect of election for participants
262AECo-ownership schemes: effect of election for purchasers
262AFCo-ownership schemes: definitions relating to schemes
Partnerships and successions
263 Qualifying activities carried on in partnership
264 Partnership using property of a partner
265 Successions: general
266 Election where predecessor and successor are connected persons
267 Effect of election
267ARestriction on effect of election
268 Successions by beneficiaries
Cars etc
268AMeaning of “car” and “motor cycle”
268BElectrically-propelled vehicles
268CTerms relating to emissions
268DHire cars for disabled persons
268EMeaning of “assigns”
Miscellaneous
269 Use of plant or machinery for business entertainment
270 Shares in plant or machinery
Part 3 Industrial buildings allowances
Chapter 1 Introduction
271 Industrial buildings allowances
272 Expenditure on the construction of a building
273 Preparation of sites for plant or machinery
Chapter 2 Industrial buildings
Buildings in use for the purposes of a qualifying trade
274 Trades and undertakings which are “qualifying trades”
275 Building used for welfare of workers
276 Parts of trades and undertakings
277 Exclusion of dwelling-houses, retail shops, showrooms, hotels and offices etc.
278 Building used by more than one licensee
Qualifying hotels and sports pavilions
279 Qualifying hotels
280 Qualifying sports pavilions
Commercial buildings (enterprise zones)
281 Commercial buildings (enterprise zones)
Supplementary provisions
282 Buildings outside the United Kingdom
283 Non-industrial part of building disregarded
284 Roads on industrial estates etc.
285 Cessation of use and temporary disuse of building
Chapter 3 The relevant interest in the building
286 General rule as to what is the relevant interest
287 Interest acquired on completion of construction
288 Effect of creation of subordinate interest
289 Merger of leasehold interest
290 Election to treat grant of lease exceeding 50 years as sale
291 Supplementary provisions with respect to elections
Chapter 4 Qualifying expenditure
Introduction
292 Meaning of “qualifying expenditure”
293 Meaning of references to carrying on a trade as a developer
Qualifying expenditure
294 Capital expenditure on construction of a building
295 Purchase of unused building where developer not involved
296 Purchase of building which has been sold unused by developer
297 Purchase of used building from developer
Qualifying enterprise zone expenditure
298 The time limit for qualifying enterprise zone expenditure
299 Application of section 294
300 Application of sections 295 and 296
301 Purchase of building within 2 years of first use
Part of expenditure within time limit for qualifying enterprise zone expenditure
302 Qualifying enterprise zone expenditure where section 295 or 296 applies
303 Purchase of building within 2 years of first use
304 Application of section 303 where developer involved
Chapter 5 Initial allowances
305 Initial allowances for qualifying enterprise zone expenditure
306 Amount of initial allowance and period for which allowance made
307 Building not industrial building when first used etc.
308 Grants affecting entitlement to initial allowances
Chapter 6 Writing-down allowances
309 Entitlement to writing-down allowance
310 Basic rule for calculating amount of allowance
311 Calculation of allowance after sale of relevant interest
312 Allowance limited to residue of qualifying expenditure
313 Meaning of “the residue of qualifying expenditure”
313ACalculation of allowance after sale of relevant interest: anti-avoidance
Chapter 7 Balancing adjustments
General
314 When balancing adjustments are made
315 Main balancing events
316 Proceeds from main balancing events
317 Balancing event where hotel not qualifying hotel for 2 years
Calculation of balancing adjustments
318 Building an industrial building etc. throughout
319 Building not an industrial building etc. throughout
320 Overall limit on balancing charge
Meaning of “the relevant period of ownership” etc.
321 The relevant period of ownership
322 Starting expenditure
323 Adjusted net cost
324 Net allowances
Balancing allowances restricted where sale subject to subordinate interest
325 Balancing allowances restricted where sale subject to subordinate interest
326 Interpretation of section 325
Qualifying enterprise zone expenditure: effect of realising capital value
327 Capital value provisions: application of provisions
328 Balancing adjustment on realisation of capital value
329 Capital value that is attributable to subordinate interest
330 Exception for payments more than 7 years after agreement
331 Capital value provisions: interpretation
Chapter 8 Writing off qualifying expenditure
332 Introduction
333 Writing off initial allowances
334 Writing off writing-down allowances
335 Writing off research and development allowances
336 Writing off expenditure when building not an industrial building
337 Writing off or increase of expenditure where balancing adjustment made
338 Writing off capital value which has been realised
339 Crown or other person not within the charge to tax entitled to the relevant interest
340 Treatment of demolition costs
Chapter 9 Highway undertakings
341 Carrying on of highway undertakings
342 The relevant interest
343 Balancing adjustment on ending of concession
344 Cases where highway concession is to be treated as extended
Chapter 10 Additional VAT liabilities and rebates
Introduction
345 Introduction
Additional VAT liabilities
346 Additional VAT liabilities and initial allowances
347 Additional VAT liabilities and writing-down allowances
348 Additional VAT liabilities and writing off initial allowances
Additional VAT rebates
349 Additional VAT rebates and writing-down allowances
350 Additional VAT rebates and balancing adjustments
351 Additional VAT rebates and writing off qualifying expenditure
Chapter 11 Giving effect to allowances and charges
352 Trades
353 Lessors and licensors
354 Buildings temporarily out of use
355 Buildings for miners etc.: carry-back of balancing allowances
Chapter 12 Supplementary provisions
356 Apportionment of sums partly referable to non-qualifying assets
357 Arrangements having an artificial effect on pricing
358 Requisitioned land
359 Provisions applying on termination of lease
360 Meaning of “lease” etc.
Part 3ABusiness Premises Renovation Allowances
Chapter 1INTRODUCTION
360ABusiness premises renovation allowances
Chapter 2QUALIFYING EXPENDITURE
360BMeaning of “qualifying expenditure”
360BAExpenditure not treated as qualifying expenditure if delay in carrying out works etc
Chapter 3QUALIFYING BUILDINGS AND QUALIFYING BUSINESS PREMISES
360CMeaning of “qualifying building”
360DMeaning of “qualifying business premises”
Chapter 4THE RELEVANT INTEREST IN THE QUALIFYING BUILDING
360EGeneral rule as to what is the relevant interest
360FInterest acquired on completion of conversion
Chapter 5INITIAL ALLOWANCES
360GInitial allowances
360HPremises not qualifying business premises or relevant interest sold before premises first used or let
Chapter 6WRITING-DOWN ALLOWANCES
360IEntitlement to writing-down allowances
360JAmount of allowance
360K Meaning of “ the residue of qualifying expenditure ”
Chapter 7GRANTS IN RESPECT OF QUALIFYING EXPENDITURE
360LGrants affecting entitlement to allowances
Chapter 8BALANCING ADJUSTMENTS
360MWhen balancing adjustments are made
360NBalancing events
360OProceeds from balancing events
360PCalculation of balancing adjustments
Chapter 9WRITING OFF QUALIFYING EXPENDITURE
360QIntroduction
360RWriting off initial allowances and writing-down allowances
360STreatment of demolition costs
Chapter 10 ADDITIONAL VAT LIABILITIES AND REBATES
360TIntroduction
360U Additional VAT liabilities and initial allowances
360V Additional VAT liabilities and writing-down allowances
360W Additional VAT liabilities and writing off initial allowances
360X Additional VAT rebates and balancing adjustments
360Y Additional VAT rebates and writing off qualifying expenditure
Chapter 11SUPPLEMENTARY PROVISIONS
360ZGiving effect to allowances and charges: trades
360Z1Giving effect to allowances and charges: lessors and licensees
360Z2Apportionment of sums partly referable to non-qualifying assets
360Z3Provisions applying on termination of lease
360Z4 Meaning of “lease” etc.
Part 4 Agricultural buildings allowances
Chapter 1 Introduction
361 Agricultural buildings allowances
362 Meaning of “husbandry”
363 Expenditure on the construction of a building
Chapter 2 The relevant interest
364 General rule as to what is the relevant interest
365 Effect of creation of subordinate lease
366 Interest conveyed or assigned by way of security
367 Merger of leasehold interest
368 Provisions applying on ending of lease
Chapter 3 Qualifying expenditure
369 Capital expenditure on construction of agricultural building
370 Purchase of relevant interest before first use of agricultural building
371 Different relevant interests in different parts of the related agricultural land
Chapter 4 Writing-down allowances
372 Entitlement to writing-down allowance
373 Basic rule for calculating amount of allowance
374 First use of building not for purposes of husbandry, etc.
375 Effect of acquisition of relevant interest after first use of building
376 Calculation of allowance after acquisition
377 Chargeable period when balancing adjustment made
378 Allowance limited to residue of qualifying expenditure
379 Final writing-down allowance
Chapter 5 Balancing adjustments
General
380 When balancing adjustments are made
381 Balancing events (on making an election)
382 Requirements as to elections
383 Proceeds from balancing events
384 Exclusion of proportion of proceeds
Calculation of balancing adjustments
385 Calculation of balancing adjustment
386 The residue of qualifying expenditure
387 Overall limit on balancing charge
388 Acquisition of relevant interest in part of land, etc.
389 Balancing allowances restricted where sale subject to subordinate interest etc.
390 Interpretation of section 389
Chapter 6 Supplementary provisions
Giving effect to allowances and charges
391 Trades
392UK property businesses
Meaning of “freehold interest”, “lease” etc.
393 Meaning of “freehold interest”, “lease”, etc.
Part 4A FLAT CONVERSION ALLOWANCES
Chapter 1 INTRODUCTION
393A Flat conversion allowances
Chapter 2 QUALIFYING EXPENDITURE
393B Meaning of “qualifying expenditure”
Chapter 3 QUALIFYING BUILDINGS AND QUALIFYING FLATS
393C Meaning of “qualifying building”
393D Meaning of “qualifying flat”
393E High value flats
Chapter 4 THE RELEVANT INTEREST IN THE FLAT
393F General rule as to what is the relevant interest
393G Interest acquired on completion of conversion
Chapter 5 INITIAL ALLOWANCES
393H Initial allowances
393I Flat not qualifying flat or relevant interest sold before flat first let
Chapter 6 WRITING-DOWN ALLOWANCES
393J Entitlement to writing-down allowances
393K Amount of allowance
393L Meaning of “the residue of qualifying expenditure”
Chapter 7 BALANCING ADJUSTMENTS
393M When balancing adjustments are made
393N Balancing events
393O Proceeds from balancing events
393P Calculation of balancing adjustments
Chapter 8 WRITING OFF QUALIFYING EXPENDITURE
393Q Introduction
393R Writing off initial allowances and writing-down allowances
393S Treatment of demolition costs
Chapter 9 SUPPLEMENTARY PROVISIONS
393T Giving effect to allowances and charges
393U Apportionment of sums partly referable to non-qualifying assets
393V Provisions applying on termination of lease
393W Meaning of “lease” etc.
Part 5 Mineral extraction allowances
Chapter 1 Introduction
394 Mineral extraction allowances
395 Qualifying expenditure
396 Meaning of “mineral exploration and access”
397 Meaning of “mineral asset”
398 Relationship between main types of qualifying expenditure
399 Expenditure excluded from being qualifying expenditure
Chapter 2 Qualifying expenditure on mineral exploration and access
400 Qualifying expenditure on mineral exploration and access
401 Pre-trading exploration expenditure
402 Pre-trading expenditure on plant or machinery
Chapter 3 Qualifying expenditure on acquiring a mineral asset
403 Qualifying expenditure on acquiring a mineral asset
404 Exclusion of undeveloped market value of land
405 Qualifying expenditure where buildings or structures cease to be used
406 Reduction where premium relief previously allowed
Chapter 4 Qualifying expenditure: second-hand assets
Assets reflecting expenditure on mineral exploration and access
407 Acquisition of mineral asset owned by previous trader
408 Acquisition of oil licence from non-trader
409 Acquisition of other assets from non-traders
Qualifying expenditure on assets limited by reference to historic costs
410UK oil licence: limit is original licence payment
411 Assets generally: limit is residue of previous trader’s qualifying expenditure
412 Transfers of mineral assets within group: limit is initial group expenditure
413 Transfers of mineral assets within group: supplementary
Chapter 5 Other kinds of qualifying expenditure
414 Expenditure on works likely to become valueless
415 Contribution to buildings or works for benefit of employees abroad
416 Non-ring fence trades: expenditure on restoration within 3 years of ceasing to trade
416ZARing fence trades: expenditure on site restoration
416ZB“Notional accounting period”
416ZCSite restoration services supplied by connected person
416ZDRestriction on allowance available
416ZEAllowance where site restoration undertaken for other participators in oil field
Chapter 5AFirst-year qualifying expenditure
General
416A First-year allowances available for certain types of qualifying expenditure
Types of expenditure which may qualify for first year allowances
416B Expenditure incurred by company for purposes of a ring fence trade
Supplementary
416C Time when expenditure is incurred
Chapter 6 Allowances and charges
First-year allowances
416D First-year allowances
416E Artificially inflated claims for first-year allowances
Writing-down and balancing allowances and balancing charges
417 Determination of entitlement or liability
418 Amount of allowances and charges
Unrelieved qualifying expenditure
419 Unrelieved qualifying expenditure
419AUnrelieved qualifying expenditure: entry to cash basis
Disposal values
420 Meaning of “disposal receipt”
421 Disposal of, or ceasing to use, asset
422 Use of asset otherwise than for permitted development etc.
423 Sections 421 and 422: amount of disposal value to be brought into account
424 Disposal value restricted in case of interest in land
425 Receipt of capital sum
Cases in which a person is entitled to a balancing allowance
426 Pre-trading expenditure
427 Giving up exploration, search or inquiry
428 Ceasing to work mineral deposits
429 Buildings etc. for benefit of employees abroad ceasing to be used
430 Disposal of asset, etc.
431 Discontinuance of trade
431AForeign permanent establishment exemption
431BDisposal value: no allowance/no charge cases
431CNotional allowances
431DPersons leaving cash basis
Chapter 7 Supplementary provisions
432 Giving effect to allowances and charges
433 Treatment of demolition costs
434 Time when expenditure incurred
435 Shares in assets
436 Meaning of “development” etc.
Part 6 Research and development allowances
Chapter 1 Introduction
437 Research and development allowances
438 Expenditure on research and development
Chapter 2 Qualifying expenditure
439 Qualifying expenditure
439AQualifying expenditure incurred for purposes of NI rate activity
440 Excluded expenditure: land
Chapter 3 Allowances and charges
441 Allowances
442 Balancing charges
443 Disposal values and disposal events
444 Disposal events: chargeable period for which disposal value is to be brought into account
445 Costs of demolition
Chapter 4 Additional VAT liabilities and rebates
446 Introduction
447 Additional VAT liability treated as additional expenditure etc.
448 Additional VAT rebate generates disposal value
449 Effect on balancing charges of additional VAT rebates in earlier chargeable periods
Chapter 5 Supplementary provisions
450 Giving effect to allowances and charges
451 Sales: time of cessation of ownership
Part 7 Know-how allowances
Chapter 1 Introduction
452 Know-how allowances
453 Know-how as property
Chapter 2 Qualifying expenditure
454 Qualifying expenditure
455 Excluded expenditure
Chapter 3 Allowances and charges
456 Pooling of expenditure
457 Determination of entitlement or liability
458 Amount of allowances and charges
459 Available qualifying expenditure
460 Allocation of qualifying expenditure to pools
461 Unrelieved qualifying expenditure
461AUnrelieved qualifying expenditure: entry to cash basis
462 Disposal values
462APersons leaving cash basis
463 Giving effect to allowances and charges
Part 8 Patent allowances
Chapter 1 Introduction
464 Patent allowances
465 Future patent rights
466 Grant of licences
Chapter 2 Qualifying expenditure
467 Qualifying expenditure
468 Qualifying trade expenditure
469 Qualifying non-trade expenditure
Chapter 3 Allowances and charges
470 Pooling of expenditure
471 Determination of entitlement or liability
472 Amount of allowances and charges
473 Available qualifying expenditure
474 Allocation of qualifying expenditure to pools
475 Unrelieved qualifying expenditure
475AUnrelieved qualifying expenditure: entry to cash basis
476 Disposal value of patent rights
477 Limit on amount of disposal value
477APersons leaving cash basis
Chapter 4 Giving effect to allowances and charges
478 Persons having qualifying trade expenditure
479 Persons having qualifying non-trade expenditure: income tax
480 Persons having qualifying non-trade expenditure: corporation tax
Chapter 5 Supplementary provisions
481 Anti-avoidance: limit on qualifying expenditure
482 Sums paid for Crown use etc. treated as paid under licence
483 Meaning of “income from patents”
Part 9 Dredging allowances
Qualifying expenditure on dredging, etc.
484 Dredging allowances
485 Qualifying expenditure
486 Pre-trading expenditure of qualifying trades, etc.
Writing-down and balancing allowances
487 Writing-down allowances
488 Balancing allowances
Giving effect to allowances
489 Giving effect to allowances
Part 10 Assured tenancy allowances
Chapter 1 Introduction
490 Assured tenancy allowances
491 Allowances available in relation to old expenditure only
492 Meaning of “approved body”
493 Expenditure on the construction of a building
Chapter 2 The relevant interest
Introduction
494 Introduction
The relevant interest in the building
495 General rule as to what is the relevant interest in the building
496 Interest acquired on completion of construction
497 Effect of creation of subordinate interest
498 Merger of leasehold interest
499 Provisions applying on termination of lease
The relevant interest in the dwelling-house
500 The relevant interest in the dwelling-house
Chapter 3 Qualifying expenditure
501 Capital expenditure on construction
502 Purchase of unused dwelling-house where developer not involved
503 Purchase of dwelling-house sold unused by developer
Chapter 4 Qualifying dwelling-houses
504 Requirements relating to the landlord
505 Qualifying dwelling-houses: exclusions
506 Dwelling-house ceasing to be qualifying dwelling-house
Chapter 5 Writing-down allowances
Entitlement to and calculation of writing-down allowances
507 Entitlement to writing-down allowance
508 Basic rule for calculating amount of allowance
509 Calculation of allowance after sale of relevant interest
510 Allowance limited to residue of qualifying expenditure attributable to dwelling-house
Interpretation
511 Qualifying expenditure attributable to dwelling-house
512 Residue of qualifying expenditure attributable to dwelling-house
Chapter 6 Balancing adjustments
General
513 When balancing adjustments are made
514 Balancing events
515 Proceeds from balancing events
Calculation of balancing adjustments
516 Dwelling-house a qualifying dwelling-house throughout
517 Dwelling-house not a qualifying dwelling-house throughout
518 Overall limit on balancing charge
519 Recovery of old initial allowances made on incorrect assumptions
Meaning of “the relevant period of ownership” etc.
520 The relevant period of ownership
521 Starting expenditure
522 Adjusted net cost
Chapter 7 Writing off qualifying expenditure attributable to dwelling-house
523 Introduction
524 Writing off initial allowances
525 Writing off writing-down allowances
526 Writing off expenditure for periods when building not used as qualifying dwelling-house
527 Writing off or increase of expenditure where balancing adjustment made
528 Treatment of demolition costs
Chapter 8 Supplementary provisions
529 Giving effect to allowances and charges
530 Apportionment of sums partly referable to non-qualifying assets
531 Meaning of “dwelling-house”, “lease” etc.
Part 11 Contributions
Chapter 1 Exclusion of expenditure met by contributions
Rules excluding contributions
532 The general rule excluding contributions
533 Exclusion of contributions to dredging
Exceptions to the general rule excluding contributions
534 Northern Ireland regional development grants
535 Insurance or compensation money
536 Contributions not made by public bodies and not eligible for tax relief
Chapter 2 Contribution allowances
Contribution allowances under Parts 2, 3, 4 and 5
537Conditions for contribution allowances under Parts 2... and 5
538 Plant and machinery
539 Industrial buildings
540 Agricultural buildings
541 Mineral extraction
Effect of transfers of C’s trade on contribution allowances under Parts 3, 4 and 5
542 Transfer of C’s trade ...
Contribution allowances under Part 9
543 Contribution allowances under Part 9
Part 12 Supplementary provisions
Chapter 1 LONG-TERM business
544 Management assets
545 Investment assets
Chapter 2 Additional VAT liabilities and rebates: interpretation, etc.
546 Introduction
547“Additional VAT liability” and “additional VAT rebate”
548 Time when additional VAT liability or rebate is incurred or made
549 Chargeable period in which, and time when, additional VAT liability or rebate accrues
550 Apportionment of additional VAT liabilities and rebates
551 Supplementary
Chapter 3 Disposals of oil licences: provisions relating to Parts 5 and 6
Introduction
552 Meaning of “oil licence” and “interest in an oil licence”
Oil licences relating to undeveloped areas
553 Consideration to be treated as nil
554 Circumstances in which oil licence relates to undeveloped area
Disposal of oil licence with exploitation value
555 Disposal of oil licence with exploitation value
Minor definitions
556 Minor definitions
Chapter 4 Partnerships, successions and transfers
557 Application of sections 558 and 559
558 Effect of partnership changes
559 Effect of successions
560 Transfer of insurance company business
560ATransfers of trade without a change of ownership
561 Transfer or division of UK business
561A Transfer of asset by reason of cross-border merger
Chapter 5 Miscellaneous
Apportionment
562 Apportionment where property sold together
Procedure for determining certain questions
563 Procedure for determining certain questions affecting one or more persons
564 Questions to which procedure in section 563 applies
Tax agreements for income tax purposes
565 Tax agreements for income tax purposes
Companies not resident in the United Kingdom
566 Companies not resident in the United Kingdom
Sales treated as being for alternative amount
567 Sales treated as being for alternative amount: introductory
568 Sales treated as being at market value
569 Election to treat sale as being for alternative amount
570 Elections: supplementary
Anti-avoidance
570AAvoidance affecting proceeds of balancing event
Chapter 6 Final provisions
Orders and regulations
570BOrders and regulations made by Treasury or Commissioners
General interpretation
571 Application of Act to parts of assets
572 References to sale of property and time of sale
573 Transfers treated as sales
574 Meaning of “control”
575Meaning of “connected” persons
575ASection 575: supplementary
576 Meaning of “the Inland Revenue” etc.
577 Other definitions
Amendments, repeals, citation etc.
578 Consequential amendments
579 Commencement and transitional provisions and savings
580 Repeals
581 Citation
Schedules
SCHEDULE A1First-year tax credits
Part 1Entitlement to first-year tax credits
Entitlement to first-year tax credits
1(1) A company may claim a first-year tax credit for...
Amount of first-year tax credit
2(1) The amount of the first-year tax credit to which...
Meaning of “relevant first-year expenditure”
3(1) In this Schedule “ relevant first-year expenditure ” means...
Incurring a loss in carrying on a qualifying activity
4Paragraphs 5 to 9 apply for the interpretation of paragraph...
5(1) This paragraph applies where the qualifying activity is an...
6(1) This paragraph applies where the qualifying activity is an...
7(1) This paragraph applies where— (a) the qualifying activity is...
8(1) This paragraph applies where the qualifying activity is managing...
9(1) This paragraph applies where the qualifying activity is basic...
Unrelieved loss
10Paragraphs 11 to 16 apply for the interpretation of paragraph...
11(1) This paragraph applies where the qualifying activity is a...
12(1) This paragraph applies where the qualifying activity is an...
13(1) This paragraph applies where the qualifying activity is an...
14(1) This paragraph applies where— (a) the qualifying activity is...
15(1) This paragraph applies where the qualifying activity is managing...
16(1) This paragraph applies where the qualifying activity is basic...
Total amount of company's PAYE and NICs liabilities
17(1) For the purposes of paragraph 2(2)(a) the total amount...
Part 2Giving effect to first-year tax credits
Payment in respect of first-year tax credit
18(1) Where a company is entitled to a first-year tax...
Restriction on losses carried forward
19(1) For the purposes of the relieving provisions (see paragraph...
20The relieving provisions are— (a) where the qualifying activity is...
21(1) This paragraph applies if the qualifying activity is an...
22(1) This paragraph applies where the qualifying activity is basic...
Payment in respect of first-year tax credit not income
23A payment in respect of a first-year tax credit is...
Part 3Clawback of first-year tax credit
Circumstances in which first-year tax credit clawed back
24(1) This paragraph applies where— (a) a company to which...
Interpretation
25(1) This paragraph applies for the interpretation of this Part...
Amount of restored loss
26(1) The amount of the restored loss is— ( LS...
Clawback of first-year tax credits: administrative provision
27(1) Where paragraph 24 applies, all such assessments and adjustments...
Part 4Supplementary
Artificially inflated claims
28(1) To the extent that a transaction is attributable to...
Interpretation
29In this Schedule— “ HMRC ” means the Commissioners for...
Schedule 1 Abbreviations and defined expressions
Part 1 Abbreviations
Part 2 Defined expressions
Schedule 2 Consequential amendments
The Taxes Management Act 1970 (c. 9)
1 Section 42 (procedure for making claims etc.)
2 Section 57 (regulations about appeals)
3 Section 58 (proceedings in tax cases in Northern Ireland)
4 Section 98 (special returns, etc.)
5
The Finance Act 1982 (c. 39)
6 Section 137 (expenditure met by regional development plans to be disregarded for certain purposes)
The London Regional Transport Act 1984 (c. 32)
7 Schedule 5 (transitional provisions and savings)
The Films Act 1985 (c. 21)
8 Section 6 (certification of films as British films)
9 Schedule 1 (certification of films as British films)
The Trustee Savings Banks Act 1985 (c. 58)
10 Schedule 2 (taxation)
The Income and Corporation Taxes Act 1988 (c. 1)
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29 Section 384 (restrictions on right of set-off)
30
31
32
33
34
35
36
37
38
39 Sections 434D and 434E (capital allowances: management assets; investment assets)
40
41
42
43
44 Sections 520 to 523 (patents)
45
46
47 Section 530 (disposal of know-how)
48
49
50
51
52
53
54
55
56
57
58
59 Section 831 (interpretation of Act)
60
61 Section 834 (interpretation of the Corporation Tax Acts)
62
63 Schedule 18 (group relief)
64 Schedule 19AC (modification of Act in relation to overseas life insurance companies)
65 Schedule 21 (tax relief in connection with schemes for rationalising industry and other redundancy schemes)
66 Schedule 24 (assumptions for calculating chargeable profits, creditable tax and corresponding United Kingdom tax of foreign companies)
67
68
The Finance Act 1988 (c. 39)
69 Schedule 12 (building societies: change of status)
The Finance Act 1989 (c. 26)
70
The Electricity Act 1989 (c. 29)
71 Schedule 11 (taxation provisions)
The Finance Act 1990 (c. 29)
72 Section 126 (pools payments for football ground improvements)
The Finance Act 1991 (c. 31)
73
74 Section 78 (sharing of transmission facilities)
The Social Security Contributions and Benefits Act 1992 (c. 4)
75 Schedule 2 (levy of Class 4 contributions with income tax)
The Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c. 7)
76 Schedule 2 (levy of Class 4 contributions with income tax)
The Taxation of Chargeable Gains Act 1992 (c. 12)
77 Section 37 (consideration chargeable to tax on income)
78 Section 41 (restriction of losses by reference to capital allowances etc.)
79 Section 195 (allowance of certain drilling expenditure)
80 Section 288 (interpretation)
81 Schedule 3 (assets held on 31st March 1982)
The Finance (No. 2) Act 1992 (c. 48)
82 New sections 40A to 40D (films)
83 Section 41 (relief for preliminary expenditure)
84 Section 42 (relief for production or acquisition expenditure)
85 Section 43 (interpretation of sections 41 and 42)
86
87 Schedule 17 (Northern Ireland electricity)
The Finance Act 1993 (c. 34)
88 Section 92 (the basic rule: sterling to be used)
89 Section 93 (use of currency other than sterling)
The Agriculture Act 1993 (c. 37)
90 Schedule 2 (provisions relating to carrying out approved schemes or reorganisation)
The Finance Act 1994 (c. 9)
91 Schedule 24 (provisions relating to the Railways Act 1993)
92 Schedule 25 (Northern Ireland Airports Limited)
The Coal Industry Act 1994 (c. 21)
93 Schedule 4 (taxation provisions)
The Atomic Energy Authority Act 1995 (c. 37)
94 Schedule 3 (taxation provisions)
The Finance Act 1996 (c. 8)
95 Section 151 (benefits under pilot schemes)
96
The Broadcasting Act 1996 (c. 55)
97 Schedule 7 (transfer schemes relating to BBC transmission network: taxation provisions)
The Finance Act 1997 (c. 16)
98 Schedule 12 (leasing arrangements: finance leases and loans)
The Finance (No. 2) Act 1997 (c. 58)
99 Section 48 (films: relief for production or acquisition expenditure)
The Finance Act 1998 (c. 36)
100 Section 117 (company tax returns, assessments and related matters)
101
102
103 Schedule 18 (company tax returns, assessments and related matters)
The Finance Act 1999 (c. 16)
104
The Greater London Authority Act 1999 (c. 29)
105 Schedule 33 (taxation)
The Finance Act 2000 (c. 17)
106 Section 105 (corporation tax: use of currencies other than sterling)
107
108 Schedule 22 (tonnage tax)
The Transport Act 2000 (c. 38)
109 Schedule 26 (transfers: tax)
Schedule 3 Transitionals and savings
Part 1 Continuity of the law
1The repeal of provisions and their enactment in a rewritten...
2Paragraph 1— (a) does not apply to any change in...
3Any subordinate legislation or other thing which—
4Any reference (express or implied) in any enactment, instrument or...
5Any reference (express or implied) in any enactment, instrument or...
6Paragraphs 1 to 5 have effect instead of section 17(2)...
7Paragraphs 4 and 5 apply only in so far as...
Part 2 Changes in the law
8(1) This paragraph applies where, in the case of any...
Part 3 General
Capital expenditure
9Subsections (2) and (3) of section 4 apply with the...
Exclusion of double relief
10Section 9 does not apply in relation to expenditure incurred...
Part 4 Plant and machinery allowances
Introduction
11 Use for qualifying activity of plant or machinery provided for other purposes
12 Use for qualifying activity of plant or machinery which is a gift
Qualifying expenditure
13 Buildings, structures and land
First-year qualifying expenditure
14
Hire-purchase and similar contracts
15 Plant or machinery acquired under hire purchase etc.
16 Plant or machinery on hire purchase etc.: fixtures
17 Plant or machinery provided by lessee
Computer software
18 Software and rights to software
Cars, etc.
19
Long-life assets
20 Long-life asset expenditure
Overseas leasing
21 Meaning of “overseas leasing”
22 Recovery of first-year allowances in case of joint lessees
23 Letting ships or aircraft to obtain old first-year allowance not a qualifying purpose
Ships: deferments etc.
24 Further registration requirement
Mining and oil industries
25 Pre-trading expenditure on mineral exploration and access
26 Abandonment expenditure incurred before cessation of ring fence trade
27 Abandonment expenditure incurred after cessation of ring fence trade
28 Oil production sharing contracts
Fixtures
29 Meaning of “interest in land” for purposes of Chapter 14 of Part 2 (fixtures)
30 Equipment lessors
31 Equipment lessee has qualifying activity etc.
32 Equipment lessor has right to sever fixture that is not part of building
33 Equipment lease is part of affordable warmth programme
34 Purchaser of land giving consideration for fixture
35 Purchaser of land discharging obligations of equipment lessee
36 Incoming lessee where lessor entitled to allowances
37 Incoming lessee where lessor not entitled to allowances
38 Fixture on which a plant and machinery allowance has been claimed
39 Fixture on which industrial buildings allowance has been made
40 Fixture on which research and development allowance has been made
41 Disposal value in relation to fixtures: general
Assets provided or used only partly for qualifying activity
42 Effect of significant reduction in use for purposes of qualifying activity
Anti-avoidance
43 Relevant transactions: sale, hire-purchase (etc.) and assignment
44 Hire purchase etc. and finance leases
45 Sale and finance leasebacks
Additional VAT liabilities and rebates
46
47
48
49
50
51
Supplementary provisions
52 Successions by beneficiaries
53Subsections (6) and (7) of section 268 do not apply...
General
54 Vehicles provided by employees in 1990-91
55 Certain expenditure incurred before 6th April 1976
Part 5 Industrial buildings allowances
Industrial buildings
56 Bridge undertakings
57 Building used by more than one licensee
58 Qualifying hotels
59 Non-industrial part of building disregarded
Qualifying expenditure
60 Purchase of used building from developer
61 Qualifying enterprise zone expenditure
62Sections 301, 303 and 304 do not apply in relation...
63If— (a) the relevant interest in a building was sold...
Initial allowances
64 Building occupied by qualifying licensee
65 Grants affecting entitlement to initial allowances
Writing-down allowances
66 Basic rule for calculating amount of allowance
67 Calculation of amount after relevant event
Balancing adjustments
68 When balancing adjustments are made
69 Net allowance given
70For the purposes of section 324 an allowance is treated...
71 Balancing adjustment on realisation of capital value
Writing off qualifying expenditure
72 Writing off qualifying expenditure when building not an industrial building
73 Crown or other person not within the charge to tax entitled to the relevant interest
Highway undertakings
74 Special provisions relating to highway concessions
Additional VAT liabilities and rebates
75 Additional VAT liabilities and initial allowances: 1992-93 cases
76 Additional VAT liabilities and initial allowances: further case
77 1992-93 qualifying expenditure
Supplementary provisions
78 Arrangements having an artificial effect on pricing
General
79 Expenditure on preparatory work on land where building used before 6th April 1956
Part 6 Agricultural buildings allowances
80 Overall limit on balancing charge
81 Meaning of “freehold interest in land” for purposes of Part 4
82 Exclusion of expenditure incurred before 1st April 1986
83 The writing-down period
Part 7 Mineral extraction allowances
Qualifying expenditure on acquiring a mineral asset
84 Qualifying expenditure where buildings or structures cease to be used
Qualifying expenditure: second-hand assets
85 Claims before 26th November 1996 in respect of acquisition of mineral asset owned by previous trader
86 Acquisition of oil licence from non-trader before 13th September 1995
87 Restrictions on qualifying expenditure in case of UK oil licence and certain other assets inapplicable for expenditure pre-16th July 1985
88 Expenditure incurred pre-1st April 1986
Part 8 Research and development allowances
89 Expenditure incurred partly on research and development
90 References to research and development in relation to new trades
91 Disposal of oil licences
Part 9 Patent allowances
Expenditure incurred before 1st April 1986
92 Scope of paragraphs 93 to 101
93 Qualifying expenditure and unrelieved qualifying expenditure
94 Entitlement to writing-down allowances
95 The writing-down period
96 Calculation of writing-down allowances
97 End of writing-down allowances
98 Reduced writing-down allowance
99 Balancing allowance on sale or expiry of patent rights
100 Balancing charges
101 Giving effect to allowances and charges
Supplementary provisions
102 Limit on qualifying expenditure
Part 10 Dredging allowances
103 Writing-down allowances
104 Balancing allowances
105 The writing-down period
Part 11 Contributions
106 Regional development grants
107 Contributions not made by public bodies and not eligible for tax relief
108 Conditions for allowances
109 Agricultural buildings
110Sections 368, 375 and 379 apply with the necessary modifications,...
Part 12 Supplemental
111 Transfer of insurance company business
112 Election regarding sale consideration
Part 13 Other enactments
113(1) Subsections (2) and (3) of section 578A of ICTA...
114Paragraph 18A of Schedule 30 to ICTA (transitional provisions and...
115The repeals made by CAA 1990 do not have effect...
116(1) Sections 40A to 40D of F(No.2)A 1992 (films) apply...
117Section 40D of F(No.2)A 1992 (election relating to tax treatment...
Schedule 4 Repeals

Royal arms

Capital Allowances Act 2001

2001 CHAPTER 2

An Act to restate, with minor changes, certain enactments relating to capital allowances.

Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—