SCHEDULES
SCHEDULE 26Special rate expenditure and the special rate pool
Part 2Commencement etc
Sale between connected persons
15
1
This paragraph applies where, on or after the relevant date—
a
there is a sale of a pre-commencement integral feature,
b
the buyer and seller are connected persons (within the meaning of section 575 of CAA 2001), and
c
the buyer's expenditure on the integral feature would (apart from this paragraph) be special rate expenditure.
2
An integral feature is a pre-commencement integral feature if the seller—
a
incurred expenditure on it before the relevant date, or
b
incurred expenditure on it on or after that date which was not qualifying expenditure because of a previous application of this paragraph.
3
The buyer's expenditure on the integral feature is not qualifying expenditure unless—
a
the original expenditure was qualifying expenditure, or
b
the buyer's expenditure would have been qualifying expenditure, had it been incurred at the time the original expenditure was incurred.
4
The “original expenditure”—
a
where the integral feature is a pre-commencement integral feature because of sub-paragraph (2)(a), is the expenditure mentioned in that sub-paragraph, and
b
otherwise, is the expenditure incurred on the integral feature before the relevant date by virtue of which this paragraph first applied.
5
The “relevant date” has the same meaning as in paragraph 14.