Part 2Plant and machinery allowances

Chapter 8Cars, etc.

Cars above the cost threshold

78Effect of partial depreciation subsidy

(1)

This section applies if—

(a)

a car to which section 74 applies is in use for the purposes of the qualifying activity,

(b)

there is paid to the person carrying on that activity a sum in respect of, or which takes account of, part of the depreciation of the car resulting from that use, and

(c)

the sum does not fall to be taken into account as income of that person or in calculating the profits of any qualifying activity carried on by him.

(2)

The amount of—

(a)

any writing-down allowance or balancing allowance to which the person is entitled, or

(b)

any balancing charge to which the person is liable,

must be reduced to an amount which is just and reasonable having regard to the relevant circumstances.

(3)

In calculating under section 59 the amount of unrelieved qualifying expenditure carried forward, a reduction of a writing-down allowance under subsection (2) is to be disregarded.

(4)

This section has effect for the chargeable period in which any such sum as is mentioned in subsection (1)(b) is first paid and for any subsequent chargeable period.

(5)

If this section applies, Chapter 16 (partial depreciation subsidies) does not apply.