Section 51A Entitlement to annual investment allowance
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Amendments
Section 51A inserted by Finance Act 2008 section 74 and Schedule 24 para 3 in relation to expenditure incurred on or after 1 April 2008 (for corporation tax purposes), and 6 April 2008 (for income tax purposes).
(1) A person is entitled to an allowance (an “annual investment allowance”) in respect of AIA qualifying expenditure if—
(a) the expenditure is incurred in a chargeable period to which this Act applies, and
(b) the person owns the plant and machinery at some time during that chargeable period.
(2) Any annual investment allowance is made for the chargeable period in which the AIA qualifying expenditure is incurred.
(3) If the AIA qualifying expenditure incurred in a chargeable period is less than or equal to the maximum allowance, the person is entitled to an annual investment allowance in respect of all the AIA qualifying expenditure.
(4) If the AIA qualifying expenditure incurred in a chargeable period is more than the maximum allowance, the person is entitled to an annual investment allowance in respect of so much of the AIA qualifying expenditure as does not exceed the maximum allowance.
(5) The maximum allowance is £50,000.
(6) But if the chargeable period is more or less than a year, the maximum allowance is proportionately increased or reduced.
(7) A person may claim an annual investment allowance in respect of all AIA qualifying expenditure in respect of which the person is entitled to an allowance, or in respect of only some of it.
(8) The Treasury may by order substituted for the amount for the time being specified in subsection (5) such other amount as it thinks fit.
(9) An order under subsection (8) may make such incidental, supplemental, consequential and transitional provision as the treasury thinks fit.
(10) This section is subject to—
(a) section 51B to 51N (restrictions on entitlement to annual investment allowance),
(b) section 205 (reduction of allowance if plant or machinery provided partly for purposes other than those of qualifying activity),
(c) section 210 (reduction of allowance if it appears that a partial depreciation subsidy is or will be payable), and
(d) section 217, 218A (and 241 (anti -avoidance: no allowance in certain cases),
and needs to be read with section 236 (additional VAT liabilities).
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