Capital Allowances Act 2001

Capital Allowances Act 2001

2001 CHAPTER 2

Commentary on Sections

Glossary

Part 2: Plant and machinery allowances

Chapter 12: Ships

Section 149: Exclusions: later events

566. This section is based on section 33D(2) and (3) of CAA 1990. It means expenditure ceases to qualify for attribution if any of the events listed in subsection (1) occurs. This stops expenditure for ships, which only temporarily satisfy the conditions, being attributed to deferred balancing charges.

567. Subsection (1)(a) provides that the ship has to be a “qualifying ship” for the first three years after it is first brought into use. This term is defined in sections 151 to 154. The 3-year period stops early if the ship begins to be owned by an unconnected third party. CAA 1990 contains the words “without having been so brought into use”. This Act does not as the meaning is covered by the use in subsection (2)(a) of the words “first” and “if earlier”.

568. Subsection (1)(b) requires that the expenditure on the ship is not allocated to the appropriate non-ship pool. This only applies to the expenditure to which a deferred balancing charge is attributed. If the total expenditure on the provision of a ship exceeds the deferred amount, the excess can be allocated to the appropriate non-ship pool.

569. Subsection (1)(c) requires that the expenditure is not on a ship for overseas leasing which is not protected leasing.