Section 4 Capital expenditure
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(1) In this Act “capital expenditure” and “capital sums” are used in the sense given in this section.
(2) “Capital expenditure” and “capital sums” do not include, in relation to a person incurring the expenditure or paying the sums—
(a) any expenditure or sum that may be deducted in calculating the profits or gains of a trade, profession or vocation or property business carried on by the person, or
[(b) any expenditure or sum that may be allowed as a deduction under a relevant provision from the taxable earnings from an employment or office held by the person.]1
Amendments
1 Para (b) substituted by Income Tax (Earnings and Pensions) Act 2003 Schedule 6 para 247(2) for 2003-2004 and later tax years (for income tax purposes), and for accounting periods ending after 5 April 2003 (for corporation tax purposes).
(2A) In subsection (2)—
“relevant provision” means any of the following—
(a) section 262;
(b) section 232 of ITEPA 2003 (giving effect to mileage allowance relief);
(c) Chapters 2 to 6 of Part 5 of that Act (general deductions allowed from earnings); and
[(d) sections 188 to 194 of FA 2004 (contributions under registered pension schemes), and]1
“taxable earnings” has the meaning given by section 10 of ITEPA 2003.
Amendments
Subs (2A) inserted by Income Tax (Earnings and Pensions) Acts 2003 section 722 Schedule 6 para 247 for 2003-2004 and later tax years (for income tax purposes), and for accounting periods ending after 5 April 2003 (for corporation tax purposes).
1 Para (d) of definition of “relevant provision” substituted by Finance Act 2004 section 281 and Schedule 35 para 48 from 6 April 2006.
(3) “Capital expenditure” and “capital sums” do not include, in relation to a recipient of the expenditure or sums—
(a) any amounts that are to be added in calculating the profits or gains of a trade, profession or vocation or property business carried on by the recipient, or
(b) any amounts that are [earnings]1 of an employment or office held by the recipient.
Amendments
1 Substituted by Income Tax (Earning and Pensions) Tax 2003 Schedule 6 para 247(4) for 2003-2004 and later tax years (for income tax purposes), and for accounting periods ending after 5 April 2003 (for corporation tax purposes).
(4) “Capital expenditure” and “capital sums” do not include, in relation to—
(a) a person incurring the expenditure or paying the sums, or
(b) a recipient of the expenditure or sums,
any expenditure or sum in the case of which a deduction of income tax falls or may fall to be made under [Chapter 6 of Part 15 of ITA 2007 (deduction from annual payments or patent royalties) or under section 906 of that Act (certain royalties etc where usual place of abode of owner is abroad)]1.
Amendments
1 Substituted by Income Tax Act 2007 section 1027 and Schedule 1 para 397(2) from 6 April 2007.
(5) ...
Amendments
Subs (5) omitted by Income Tax Act 2007 section 1027 and Schedule 1 para 397, and repealed by Schedule 3 Part 1 from 6 April 2007 (for income tax purposes), and for accounting periods ending after 5 April 2007 (for corporation tax purposes).
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