Finance Act 2011

12 Short-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—

  (a)

  for corporation tax purposes, 1 April 2011, and

  (b)

  for income tax purposes, 6 April 2011;

• “the relevant chargeable period” means—

  (a)

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

  (b)

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

(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)”,

and

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