Capital Allowances Act 2001

[F1 Qualifying enterprise zone expenditure U.K.

Textual Amendments

F1 Pt. 3 omitted (with effect in relation to chargeable periods beginning on or after 1.4.2011 for corporation tax purposes and 6.4.2011 for income tax purposes in accordance with ss. 84(1)(3)(4), 85, 86 of the amending Act) by virtue of Finance Act 2008 (c. 9), s. 84(2) (with Sch. 27)

298 The time limit for qualifying enterprise zone expenditure U.K.

(1) For the purposes of sections 299 to 304, the time limit for expenditure on the construction of a building on a site in an enterprise zone is—

(a) 10 years after the site was first included in the zone, or

(b) if the expenditure is incurred under a contract entered into within those 10 years, 20 years after the site was first included in the zone.

(2) In those sections “EZ building” is short for “building on a site in an enterprise zone”.

(3) In this Part “enterprise zone” means an area designated as such by an order—

(a) made by the Secretary of State [F2 , the Scottish Ministers or the National Assembly for Wales,] under powers conferred by Schedule 32 to the Local Government, Planning and Land Act 1980 (c. 65), or

(b) in Northern Ireland, made by the Department of the Environment under Article 7 of the Enterprise Zones (Northern Ireland) Order 1981 (S.I.1981/607 (N.I.15)).

Textual Amendments

F2 Words in s. 298(3) inserted (with effect as mentioned in s. 69(2) of the amending Act) by Finance Act 2001 (c. 9), s. 69(1), Sch. 21 para. 5

299 Application of section 294 U.K.

If—

(a) capital expenditure is incurred on the construction of an EZ building, and

(b) the expenditure is incurred within the time limit,

the qualifying expenditure given by section 294 is qualifying enterprise zone expenditure.

300 Application of sections 295 and 296 U.K.

If—

(a) expenditure is incurred on the construction of an EZ building, and

(b) all the expenditure is incurred within the time limit,

any qualifying expenditure given by sections 295 and 296 in relation to that expenditure is qualifying enterprise zone expenditure.

301 Purchase of building within 2 years of first use U.K.

(1) This section applies if—

(a) expenditure is incurred on the construction of an EZ building,

(b) all the expenditure is incurred within the time limit,

(c) the relevant interest in the building is sold—

(i) after the building has been used, but

(ii) within the period of 2 years beginning with the date on which the building was first used, and

(d) that sale (“the relevant sale”) is the first sale in that period after the building has been used.

(2) If this section applies—

(a) any balancing adjustment which falls to be made on the occasion of the relevant sale is to be made, and

(b) the residue of qualifying expenditure immediately after the relevant sale is to be disregarded for the purposes of this Part.

(3) If a capital sum is paid by the purchaser for the relevant interest on the relevant sale—

(a) the purchaser is to be treated as having incurred qualifying expenditure that is qualifying enterprise zone expenditure of an amount given in subsection (4), (6) or (7), and

(b) in relation to that qualifying enterprise zone expenditure, this Part applies as if the building had not been used before the date of the relevant sale.

(4) Unless subsection (6) or (7) applies, the amount of the qualifying enterprise zone expenditure is the lesser of—

(a) the capital sum paid by the purchaser for the relevant interest on the relevant sale, and

(b) the expenditure incurred on the construction of the building.

(5) Subsections (6) and (7) apply if—

(a) the expenditure incurred on the construction of the EZ building was incurred by a developer, and

(b) the relevant interest in the building has been sold by the developer in the course of the development trade.

(6) If the sale by the developer is the relevant sale, the amount of the qualifying enterprise zone expenditure is the capital sum paid by the purchaser for the relevant interest on that sale.

(7) If the sale by the developer is not the relevant sale, the amount of the qualifying enterprise zone expenditure is the lesser of—

(a) the capital sum paid by the purchaser for the relevant interest on the relevant sale, and

(b) the price paid for the relevant interest on its sale by the developer.

(8) The qualifying expenditure is to be treated as incurred when the capital sum on the relevant sale became payable.]