Capital Allowances Act 2001

[F1 Chapter 5 U.K. Initial allowances

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)

305 Initial allowances for qualifying enterprise zone expenditure U.K.

(1) A person who has incurred qualifying enterprise zone expenditure is entitled to an initial allowance in respect of the expenditure if the building on which the expenditure is incurred is to be an industrial building—

(a) occupied by that person or a qualifying lessee, or

(b) used by a qualifying licensee.

(2) In this section—

• “qualifying lessee” means a lessee under a lease to which the relevant interest is reversionary, and

• “qualifying licensee” means a licensee of—

  (a)

  the person incurring the qualifying expenditure, or

  (b)

  a lessee of the person incurring the qualifying expenditure.

306 Amount of initial allowance and period for which allowance made U.K.

(1) The amount of the initial allowance is 100% of the qualifying enterprise zone expenditure.

(2) A person claiming an initial allowance under this section may require the allowance to be reduced to a specified amount.

(3) The initial allowance is made for the chargeable period in which the qualifying expenditure is incurred.

(4) For the purposes of subsection (3), expenditure incurred for the purposes of a trade, profession or vocation by a person about to carry it on is to be treated as if it had been incurred on the first day on which the person carries on the trade, profession or vocation.

307 Building not industrial building when first used etc. U.K.

(1) No initial allowance is to be made under section 305 if, when the building is first used, it is not an industrial building.

(2) An initial allowance which has been made in respect of a building which is to be an industrial building is to be withdrawn if, when the building is first used, it is not an industrial building.

(3) An initial allowance which has been made in respect of a building which has not been used is to be withdrawn if the person to whom the allowance was made sells the relevant interest before the building is first used.

(4) All such assessments and adjustments of assessments are to be made as are necessary to give effect to this section.

308 Grants affecting entitlement to initial allowances U.K.

(1) No initial allowance is to be made in respect of expenditure to the extent that it is taken into account for the purposes of a relevant grant or relevant payment made towards that expenditure.

(2) A grant or payment is relevant if it is—

(a) a grant made under section 32, 34 or 56(1) of the Transport Act 1968 (c. 73),

(b) a payment made under section 56(2) of the Transport Act 1968, or

(c) a grant made under section 101 of the Greater London Authority Act 1999 (c. 29),

which is declared by the Treasury by order to be relevant for the purposes of the withholding of initial allowances.

(3) If a relevant grant or relevant payment towards the expenditure is made after the making of an initial allowance, the allowance is to be withdrawn to that extent.

(4) If the amount of the grant or payment is repaid by the grantee to the grantor, in whole or in part, the grant or payment is treated, to that extent, as never having been made.

(5) All such assessments and adjustments of assessments are to be made as are necessary to give effect to subsection (3) or (4).

(6) Any such assessment or adjustment is not out of time if it is made within 3 years of the end of the chargeable period in which the grant, payment or repayment was made.]