Part 1Charges, rates, allowances etc

Capital allowances

12Short-life assets

1

Part 2 of CAA 2001 (plant and machinery allowances) is amended as follows.

2

In section 86 (short-life asset pool)—

a

in subsection (2), for “four-year” (in each place) substitute “ relevant ”,

b

for subsection (3) substitute—

3

In this Chapter “the relevant cut-off” means—

a

if any of the qualifying expenditure incurred on the provision of the short-life asset was incurred before the designated day, the fourth anniversary of the end of the relevant chargeable period, and

b

in any other case, the eighth anniversary of the end of the relevant chargeable period.

3A

In subsection (3)—

  • “the designated day” means—

    1. a

      for corporation tax purposes, 1 April 2011, and

    2. b

      for income tax purposes, 6 April 2011;

  • “the relevant chargeable period” means—

    1. a

      the chargeable period in which the qualifying expenditure was incurred on the provision of the short-life asset, or

    2. b

      if the qualifying expenditure was incurred in different chargeable periods, the first chargeable period in which any of the qualifying expenditure was incurred.

c

in subsection (4), for “four-year” substitute “ relevant ”.

3

In section 65 (the final chargeable period), in subsection (3), for “four-year” substitute “ relevant ”.

4

In section 87 (short-life assets provided for leasing), in subsection (1)—

a

in paragraph (b), for “four-year” substitute “ relevant ”, and

b

in paragraph (c), for “4 years” substitute “ 8 years ”.

5

In section 89 (disposal to connected person), in subsections (1) and (5), for “four-year” (in each place) substitute “ relevant ”.

6

In Schedule 1 (defined expressions)—

a

at the appropriate place insert—

relevant cut-off (in Chapter 9 of Part 2)

section 86(3)

b

omit the entry for “four-year cut-off (in Chapter 9 of Part 2)”.