SCHEDULES
SCHEDULE 9Capital allowances for plant and machinery: anti-avoidance
Transactions to obtain allowances
1
For section 215 of CAA 2001 substitute—
215Transactions to obtain tax advantages
1
Allowances under this Part are restricted under the applicable sections if B enters into a relevant transaction with S that either—
a
has an avoidance purpose, or
b
is part of, or occurs as a result of, a scheme or arrangement that has an avoidance purpose.
2
Subsection (1)(b) may be satisfied—
a
whether the scheme or arrangement was made before or after the relevant transaction was entered into, and
b
whether or not the scheme or arrangement is legally enforceable.
3
A transaction, scheme or arrangement has an “avoidance purpose” if the main purpose, or one of the main purposes, of a party in entering into the transaction, scheme or arrangement is to enable a person to obtain a tax advantage under this Part that would not otherwise be obtained.
4
The reference in subsection (3) to obtaining a tax advantage that would not otherwise be obtained includes obtaining an allowance that is in any way more favourable to a person than the one that would otherwise be obtained.
5
If the tax advantage is of a kind described in subsection (7), “the applicable sections” are sections 217 and 218ZA(5).
6
Otherwise, “the applicable sections” are sections 217 and 218ZA(1) or, as the case may be, 218ZA(3).
7
The kinds of tax advantage are—
a
that an allowance to which B is entitled for a chargeable period is calculated using a percentage rate that is higher than the one that would otherwise be used, or
b
that B is entitled to an allowance in respect of an amount of capital expenditure sooner than B would otherwise be entitled to it.
8
If a transaction, scheme or arrangement involves—
a
a tax advantage of a kind described in subsection (7), and
b
a tax advantage not of such a kind,
subsections (5) and (6) have effect separately in relation to each tax advantage.
Restrictions on writing-down allowances
2
In section 57(3) of CAA 2001 (available qualifying expenditure), after “section 218(1),” insert “
218ZA(1) or (3),
”
.
3
In section 214 of that Act (connected persons), after “218” insert “
(or, as the case may be, 218ZA(3))
”
.
4
In section 216 of that Act (sale and leaseback, etc), in subsection (1), after “218” insert “
(or, as the case may be, 218ZA(3))
”
.
5
1
Section 218 of that Act (restriction on B's qualifying expenditure) is amended as follows.
2
In subsection (1), for “section 214, 215 or 216” substitute “
section 214 or 216
”
.
3
At the end insert—
5
This section is subject to section 218ZA(3).
4
Accordingly, in the heading of that section, insert at the end “
: section 214 or 216
”
.
6
After section 218 of that Act insert—
218ZARestrictions on writing-down allowances: section 215
1
If this subsection applies as a result of section 215, all or part of B's expenditure under the relevant transaction is to be left out of account in determining B's available qualifying expenditure.
2
The amount of expenditure to be left out of account is—
a
such amount as would or would in effect cancel out the tax advantage mentioned in section 215 (whether that advantage is obtained by B or another person and whether it relates to the relevant transaction or something else), or
b
if the amount found under paragraph (a) exceeds the whole of B's expenditure under the relevant transaction, the whole of that expenditure.
3
But if subsection (1) applies as a result of section 215 and—
a
section 218 also applies as a result of section 214 or 216, or
b
section 228 also applies by virtue of an election under section 70I(11) or 227,
the amount of expenditure to be left out of account is the greater of X and Y.
4
For the purposes of subsection (3)—
“X” is the amount found under subsection (2), and
“Y” is the amount by which B's expenditure under the relevant transaction exceeds D (as defined in section 218 or, as the case may be, section 228).
5
If this subsection applies as a result of section 215—
a
the allowance mentioned in subsection (7)(a) of that section is to be calculated using the rate that would be used without the tax advantage, or (as the case may be)
b
the entitlement mentioned in subsection (7)(b) of that section is to be available as and when it would be available without the tax advantage.
6
Subsection (5) applies whether or not section 218 also applies as a result of section 214 or 216, or section 228 also applies by virtue of an election under section 70I(11) or 227.
Restriction of exception for manufacturers and suppliers
7
1
Section 230 of CAA 2001 (exception for manufacturers and suppliers), as amended by section 41 of this Act, is amended as follows.
2
For subsection (1) substitute—
1
The restrictions in sections 217 and 218 do not apply in relation to any plant or machinery if—
a
the relevant transaction is within section 213(1)(a) or (b),
b
the case does not fall within section 215, and
c
the conditions in subsection (3) are met.
3
Omit subsection (2).
Relevant transactions
8
After section 268D of CAA 2001 insert—
268EMeaning of “assigns”
1
For the purposes of this Part—
a
a person (“A”) is taken to assign the benefit of a contract, or rights under a contract, to another person (“B”) whenever B becomes entitled, and A ceases to be entitled, to the benefit or rights (whether by assignment, novation, variation or replacement of the contract, by operation of law or otherwise), and
b
references to an assignment are to be read accordingly.
2
Any reference in this Part to the benefit of a contract or to rights under a contract includes a reference to part of the benefit of a contract or to part of the rights under a contract.
Commencement
9
1
The amendments made by paragraphs 1 to 7 of this Schedule have effect in relation to expenditure of B's that is incurred on or after the start date (regardless of when the relevant transaction was entered into).
2
The amendment made by paragraph 8 of this Schedule has effect in relation to expenditure that is incurred on or after the start date.
3
The start date is—
a
1 April 2012, for corporation tax purposes, and
b
6 April 2012, for income tax purposes.