Capital Allowances Act 2001

406 Reduction where premium relief previously allowed

(1) This section applies if—

(a) the mineral asset is or includes an interest in land, and

(b) for chargeable periods previous to the chargeable period for which the buyer first becomes entitled to an allowance under this Part in respect of the expenditure on acquiring the mineral asset, deductions are made under section 87 of ICTA (deductions in calculating trading profits where premiums etc. taxable).

(2) The amount of the expenditure on the acquisition of the mineral asset that is qualifying expenditure is reduced by—

where—

• D is the total of the deductions made under section 87 of ICTA in the earlier chargeable periods mentioned in subsection (1)(b),

• E is the amount of the capital expenditure on the acquisition of the interest in land that would have been qualifying expenditure if the buyer had been entitled to allowances under this Part in those earlier periods, and

• T is the total amount of the capital expenditure on the acquisition of the interest in land.