Part 5 Mineral extraction allowances
Chapter 6 Allowances and charges
F2First-year allowances
416D First-year allowances
1
A person is entitled to a first-year allowance in respect of first-year qualifying expenditure if the expenditure is incurred in a chargeable period to which this Act applies.
2
Any first-year allowance is made for the chargeable period in which the first-year qualifying expenditure is incurred.
3
The amount of the allowance is a percentage of the first-year qualifying expenditure in respect of which the allowance is made, as shown in the Table—
Amount of first-year allowances
Type of first-year qualifying expenditure | Amount |
|---|---|
Expenditure qualifying under section 416B (expenditure incurred wholly for the purposes of a ring fence trade) | 100% |
4
A person who is entitled to a first-year allowance may claim the allowance in respect of the whole or a part of the first-year qualifying expenditure.
5
This section is subject to section 416E (artificially inflated claims for first-year allowances).
416EF1 Artificially inflated claims for first-year allowances
1
To the extent that a transaction is attributable to arrangements entered into wholly or mainly for a disqualifying purpose, it shall be disregarded in determining for a chargeable period the amount of any first-year allowance to which a person is entitled.
2
For the purposes of this section, arrangements are entered into wholly or mainly for a “ disqualifying purpose ” if their main object, or one of their main objects, is to enable a person to obtain—
a
a first-year allowance to which he would not otherwise be entitled, or
b
a first-year allowance of a greater amount than that to which he would otherwise be entitled.
3
In this section “ arrangements ” includes any scheme, agreement or understanding, whether or not legally enforceable.
S. 416D and preceding crossheading inserted (with effect as mentioned in s. 63(3) of the amending Act) by Finance Act 2002 (c. 23), s. 63, Sch. 21 para. 10