Finance Act 2008

Part 2 U.K. Commencement etc

Commencement U.K.

14 (1) This Schedule has effect in relation to— U.K.

(a) expenditure incurred on or after the relevant date, and

(b) long-life asset expenditure (within the meaning of Chapter 10 of CAA 2001) incurred before the relevant date but allocated to a pool in a chargeable period beginning on or after that date.

(2) Sub-paragraph (1) is subject to—

(a) section 83 (which provides that certain other long-life asset expenditure is to be treated as special rate expenditure for the purposes of CAA 2001), and

(b) paragraphs 15 to 17.

(3) The relevant date is—

(a) for corporation tax purposes, 1 April 2008, and

(b) for income tax purposes, 6 April 2008.

Sale between connected persons U.K.

15 (1) This paragraph applies where, on or after the relevant date— U.K.

(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.

Saving for intra-group transfers U.K.

16 (1) This paragraph applies where, on or after the relevant date— U.K.

(a) there is a sale of a pre-commencement integral feature,

(b) the buyer and seller are companies which are members of the same group, 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 qualifying expenditure on it—

(a) was incurred by the seller before the relevant date and allocated to the seller's main pool, or

(b) was incurred by the seller on or after that date and allocated to the seller's main pool because of a previous election under this paragraph.

(3) The buyer and seller may jointly elect for paragraph 17 to apply.

(4) The election must be made by notice to an officer of Revenue and Customs within 2 years after the date on which the sale takes place.

(5) All such assessments and adjustments of assessments are to be made as are necessary to give effect to the election.

(6) Whether the buyer and seller are members of the same group is to be determined in accordance with section 170(3) to (6) of TCGA 1992.

(7) The “relevant date” has the same meaning as in paragraph 14.

17 (1) Where this paragraph applies, for the purposes of making allowances and charges under Part 2 of CAA 2001— U.K.

(a) the integral feature is treated as having been sold by the seller to the buyer at a price which gives rise to neither a balancing allowance nor a balancing charge, and

(b) the buyer's expenditure on the integral feature is treated as qualifying expenditure which is not special rate expenditure (and, if allocated to a pool, is to be allocated to the buyer's main pool).

(2) Allowances and charges are to be made under Part 2 of CAA 2001 to or on the buyer as if everything done to or by the seller had been done to or by the buyer.

Interpretation U.K.

18 U.K. Expressions used in this Part of this Schedule and in Part 2 of CAA 2001 have the same meaning in this Part of this Schedule as in that Part of that Act.