Taxworld United Kingdom
Tax Law Online
United Kingdom
 United Kingdom Ireland
UK Login
username
password
 
 

Capital Allowances Act 2001 | Consolidated to 2009

Caa2001_small
We have incorporated changes made by all the Finance Acts up to and including the Finance Act 2009, as well as those made by Statutory Instruments (up to and including those taking effect on 1 January 2010. Each amendment is clearly cited, with the source identified.

Download eBook - £20.00 was £25.00 you save 20%

Open eBook sample Learn about eBooks

Table of Contents

Part 1 Introduction
Chapter 1 Capital allowances: general
Section 1 Capital allowances
Section 2 General means of giving effect to capital allowances
Section 3 Claims for capital allowances
Section 4 Capital expenditure
Section 5 When capital expenditure is incurred
Section 6 Meaning of “chargeable period”
Chapter 2 Exclusion of double relief
Section 7 No double allowances
Section 8 No double relief through pooling under Part 2 (plant and machinery allowances)
Section 9 Interaction between fixtures claims and other claims
Section 10 Interpretation
Part 2 Plant and machinery allowances
Chapter 1 Introduction
Section 11 General conditions as to availability of plant and machinery allowances
Section 12 Expenditure incurred before qualifying activity carried on
Section 13 Use for qualifying activity of plant or machinery provided for other purposes
Section 13A Use for other purposes of plant or machinery previously used for long funding leasing
Section 14 Use for qualifying activity of plant or machinery which is a gift
Chapter 2 Qualifying activities
Section 15 Qualifying activities
Section 16 [Ordinary property businesses]
Section 17 Furnished holiday lettings businesses
Section 18 [Managing the investments of a company with investment business]
Section 19 Special leasing of plant or machinery
Section 20 Employments and offices
Chapter 3 Qualifying expenditure
Buildings, structures and land
Section 21 Buildings
Section 22 Structures, assets and works
Section 23 Expenditure unaffected by sections 21 and 22
Section 24 Interests in land
Section 25 Building alterations connected with installation of plant or machinery
Demolition costs
Section 26 Demolition costs
Expenditure on thermal insulation, safety measures, etc.
Section 27 Application of Part to thermal insulation, safety measures, etc.
Section 28 Thermal insulation of ... buildings
Section 29 Fire safety
Section 30 Safety at designated sports grounds
Section 31 Safety at regulated stands at sports grounds
Section 32 Safety at other sports grounds
Section 33 Personal security
Expenditure on integral features
Section 33A Expenditure on provision or replacement of integral features
Section 33B Meaning of “replacement” in section 33A
Exclusion of certain types of expenditure
Section 34 Expenditure by MPs and others on accommodation
Section 34A Expenditure on plant or machinery for long funding leasing not qualifying expenditure
Section 35 Expenditure on plant or machinery for use in dwelling-house not qualifying expenditure in certain cases
Section 36 Restriction on qualifying expenditure in case of employment or office
Section 37 Exclusion where sums payable in respect of depreciation
Section 38 Production animals etc.
Chapter 3A AIA qualifying expenditure
Section 38A AIA qualifying expenditure
Section 38B General exclusions applying to section 38A
Chapter 4 First-year qualifying expenditure
General
Section 39 First-year allowances available for certain types of qualifying expenditure only
Types of expenditure which may qualify for first-year allowances
Section 40 Expenditure incurred for Northern Ireland purposes by small or medium-sized enterprises
Section 41 Miscellaneous exclusions from section 40 (expenditure for Northern Ireland purposes etc.)
Section 42 Exclusion of plant or machinery partly for use outside Northern Ireland
Section 43 Effect of plant or machinery subsequently being primarily for use outside Northern Ireland
Section 44 Expenditure incurred by small or medium-sized enterprises
Section 45 ICT expenditure incurred by small enterprises
Section 45A Expenditure on energy-saving plant or machinery
Section 45B Certification of energy-saving plant and machinery
Section 45C Energy-saving components of plant or machinery
Section 45D Expenditure on cars with low carbon dioxide emissions
Section 45E Expenditure on plant or machinery for gas refuelling station
Section 45F Expenditure on plant and machinery for use wholly in a ring fence trade
Section 45G Plant or machinery used for less than five years in a ring fence trade
Section 45H Expenditure on environmentally beneficial plant or machinery
Section 45I Certification of environmentally beneficial plant and machinery
Section 45J Environmentally beneficial components of plant or machinery
Section 46 General exclusions ...
Expenditure of small or medium-sized enterprises
Section 47 Expenditure of small or medium-sized enterprises: companies
Section 48 Expenditure of small or medium-sized enterprises: businesses
Section 49 Whether company is a member of a large or medium-sized group
Supplementary
Section 50 Time when expenditure is incurred
Section 51 Disclosure of information between UK tax authorities
Chapter 5 Allowances and charges
Annual investment allowance
Section 51A Entitlement to annual investment allowance
Section 51B First restriction: companies
Section 51C Second restriction: groups of companies
Section 51D Third restriction: groups of companies under common control
Section 51E Fourth restriction: other companies under common control
Section 51F Companies and groups: meaning of “control”
Section 51G Companies and groups: meaning of “related”
Section 51H Fifth restriction: qualifying activities under common control
Section 51I Qualifying activities: meaning of control
Section 51J Qualifying activity: meaning of “related”
Section 51K Operation of annual investment allowance where restrictions apply
Section 51L Special provision for short chargeable periods
Section 51M Special provision for long chargeable periods
Section 51N Special provision for long chargeable periods: supplementary
First-year allowances
Section 52 First-year allowances
Prevention of double relief
Section 52A Prevention of double relief
Pooling
Section 53 Pooling of qualifying expenditure
Section 54 The different kinds of pools
Writing-down and balancing allowances and balancing charges
Section 55 Determination of entitlement or liability
Section 56 Amount of allowances and charges
Section 56A Writing-down allowances for small pools
Available qualifying expenditure
Section 57 Available qualifying expenditure
Section 58 Initial allocation of qualifying expenditure to pools
Section 59 Unrelieved qualifying expenditure
Disposal events and disposal values: general
Section 60 Meaning of “disposal receipt” and “disposal event”
Section 61 Disposal events and disposal values
Section 62 General limit on amount of disposal value
Section 63 Cases in which disposal value is nil
Section 64 Case in which no disposal value need be brought into account
The final chargeable period
Section 65 The final chargeable period
List of provisions outside this Chapter about disposal values
Section 66 List of provisions outside this Chapter about disposal values
Chapter 6 Hire-purchase etc. and plant or machinery provided by lessee
Hire-purchase and similar contracts
Section 67 Plant or machinery treated as owned by person entitled to benefit of contract, etc
Section 68 Disposal value on cessation of notional ownership
Section 69 Hire-purchase etc and fixtures
Plant or machinery provided by lessee
Section 70 Plant or machinery provided by lessee
Lessees under long funding leases
Section 70A Entitlement to capital allowances
Section 70B Long funding operating lease: amount of capital expenditure
Section 70C Long funding finance lease: amount of capital expenditure
Section 70D Long funding finance lease: additional expenditure: allowances for lessee
Section 70DA Transfer and long funding leaseback: restrictions on lessee's allowances
Section 70E Disposal events and disposal values
Chapter 6A Interpretation of provisions about long funding leases
Introductory
Section 70F Introductory
Meaning of "long funding lease" etc
Section 70G “Long funding lease”
Section 70H Lessee: requirement for tax return treating lease as long funding lease
Section 70I “Short lease”
Section 70J “Funding lease”
Meaning of "plant or machinery lease"
Section 70K “Plant or machinery lease”
Section 70L Plant or machinery leased with other assets: separate derived leases
Section 70M Derived leases of plant or machinery: term and rentals
The tests for being a funded lease
Section 70N The finance lease test
Section 70O The lease payments test
Section 70P The useful economic life test
Leases excluded by right of lessor etc to claim capital allowances
Section 70Q Leases excluded by right of lessor etc to claim capital allowances
Excluded leases of background plant or machinery for a building
Section 70R Excluded leases of background plant or machinery for a building
Section 70S The disqualifications
Section 70T Orders relating to background plant or machinery for a building
Exclusion for certain plant or machinery leased with land
Section 70U Plant or machinery leased with land: low percentage value
Avoidance
Section 70V Tax avoidance involving international leasing
Transfers, assignments, novations, leaseback, variations, etc
Section 70W Transfers, assignments etc by lessor
Section 70X Transfers, assignments etc by lessee
Section 70Y Sale and leaseback, lease and leaseback etc: lessors
Section 70YA Change in accountancy classification of long funding lease
Section 70YB Long funding operating lease: extension of term of lease
Section 70YC Extension of term of lease that is not a long funding lease
Section 70YD Increase in proportion of residual amount guaranteed: review of status
Interpretation
Section 70YE “Minimum lease payments”
Section 70YF The “term” of a lease
Section 70YG “Termination amount”
Section 70YH “Termination value”
Section 70YI General definitions
Section 70YJ Power to vary the meaning of certain expressions
Chapter 7 Computer software
Section 71 Software and rights to software
Section 72 Disposal values
Section 73 Limit on disposal values
Chapter 8 Cars, etc.
Cars above the cost threshold
Section 74 Single asset pool
Section 75 General limit on amount of writing-down allowance
Section 76 Limit where part of expenditure met by another person
Section 77 Car used partly for purposes other than those of qualifying activity
Section 78 Effect of partial depreciation subsidy
Section 79 Cases where Chapter 17 (anti-avoidance) applies
Vehicles provided for purposes of employment or office
Section 80 Vehicles provided for purposes of employment or office
Interpretation
Section 81 Extended meaning of “car”
Section 82 Qualifying hire cars
Chapter 9 Short-life assets
Section 83 Meaning of “short-life asset”
Section 84 Cases in which short-life asset treatment is ruled out
Section 85 Election for short-life asset treatment: procedure
Section 86 Short-life asset pool
Section 87 Short-life assets provided for leasing
Section 88 Sales at under-value
Section 89 Disposal to connected person
Chapter 10 Long-life assets
Long-life asset expenditure
Section 90 Long-life asset expenditure
Section 91 Meaning of “long-life asset”
Section 92 Application of Chapter to part of expenditure
Expenditure excluded from being long-life asset expenditure
Section 93 Fixtures etc
Section 94 Ships
Section 95 Railway assets
Section 96 Cars
Section 97 Expenditure within the relevant monetary limit: general
Section 98 Expenditure to which the monetary limits apply
Section 99 The monetary limit
Section 100 Exceeding the monetary limit
Rules applying to long-life asset expenditure
Section 101 [Allocation of long-life asset expenditure to pool]
Section 102 Writing-down allowances [in respect of long-life asset expenditure]
Anti-avoidance provisions
Section 103 Later claims
Section 104 Disposal value of long-life assets
Chapter 10A Special rate expenditure
Special rate expenditure
Section 104A Special rate expenditure
Section 104AA Meaning of "main rate car"
Section 104B Application of Chapter to part of expenditure
Rules applying to special rate expenditure
Section 104C Special rate pool
Section 104D Writing-down allowances at 10%
Section 104E Disposal value of special rate assets
Section 104F Special rate cars: discontinued activity continued by relevant company
Chapter 11 Overseas leasing
Basic terms
Section 105 “Leasing”, “overseas leasing” etc
Section 106 The designated period
Certain expenditure to be pooled
Section 107 The overseas leasing pool
Section 108 Effect of disposal to connected person on overseas leasing pool
Allowances reduced or, in certain cases, prohibited
Section 109 Writing-down allowances at 10%
Section 110 Cases where allowances are prohibited
Recovery of excess allowances
Section 111 Excess allowances: standard recovery mechanism
Section 112 Excess allowances: connected persons
Section 113 Excess allowances: special provision for ships
Recovery of allowances given in cases where prohibition applies
Section 114 Prohibited allowances: standard recovery mechanism
Section 115 Prohibited allowances: connected persons
Application of Chapter in relation to joint lessees
Section 116 Mitigation of regime
Section 117 Recovery of allowances in case of joint lessees
Duties to supply information
Section 118 Certificate relating to protected leasing
Section 119 Notice of change of use of plant or machinery
Section 120 Notice and joint lessees
Qualifying purposes
Section 121 Meaning of “short-term leasing”
Section 122 Short-term leasing by buyer, lessee, etc
Section 123 Ships and aircraft
Section 124 Transport containers
Section 125 Other qualifying purposes
Minor definitions
Section 126 Minor definitions
Chapter 12 Ships
Pooling and postponement of allowances
Section 127 Single ship pool
Section 128 Expenditure which is not to be allocated to single ship pool
Section 129 Election to use the appropriate non-ship pool
Section 130 Notice postponing first-year or writing-down allowance
Section 131 Effect of postponement
Section 132 Disposal events and single ship pool
Section 133 Ship not used
Deferment of balancing charges
Section 134 Deferment of balancing charges: introduction
Section 135 Claim for deferment
Section 136 Further conditions for deferment
Section 137 Effect of deferment
Section 138 Limit on amount deferred
Section 139 Amount taken into account in respect of old ship
Attribution of deferred amounts
Section 140 Notice attributing deferred amounts to new expenditure
Section 141 Deferred amounts attributed to earlier expenditure first
Section 142 Variation of attribution
Section 143 Effect of attribution
Section 144 Amounts which cease to be attributable
Section 145 Requirement to notify where no entitlement to defer amounts
Expenditure on new shipping
Section 146 Basic meaning of expenditure on new shipping
Section 147 Exclusions: ship previously owned
Section 148 Exclusions: object to secure deferment
Section 149 Exclusions: later events
Section 150 Exclusions where expenditure not incurred by shipowner
Qualifying ships
Section 151 Basic meaning of qualifying ship
Section 152 Ships under 100 tons
Section 153 Ships which are not qualifying ships
Section 154 Further registration requirement
Deferment of balancing charges: supplementary provisions
Section 155 Change in the persons carrying on the qualifying activity
Section 156 Connected persons
Further provisions
Section 157 Adjustment of assessments etc
Section 158 Members of same group
Chapter 13 Provisions affecting mining and oil industries
Expenditure connected with mineral extraction trades
Section 159 Meaning of “mineral extraction trade” etc
Section 160 Expenditure treated as incurred for purposes of mineral extraction trade
Section 161 Pre-trading expenditure on mineral exploration and access
Section 161A Meaning of “offshore infrastructure”
Expenditure connected with reuse etc. of offshore oil infrastructure
Section 161B Meaning of “decommissioning expenditure”
Section 161C Expenditure related to reuse etc qualifies for writing-down allowances
Section 161D Exceptions to section 161C(2)
Provisions relating to ring fence trades
Section 162 Ring fence trade a separate qualifying activity
Section 163 [Meaning of “general decommissioning expenditure”]
Section 164 [General decommissioning expenditure] incurred before cessation of ring fence trade
Section 165 [General decommissioning expenditure] [after] ceasing ring fence trade
Transfers of interests in oil fields: anti-avoidance
Section 166 Transfers of interests in oil fields: anti-avoidance
Oil production sharing contracts
Section 167 Oil production sharing contracts
Section 168 Expenditure on plant or machinery incurred by contractor
Section 169 Expenditure on plant or machinery incurred by participator
Section 170 Participator’s expenditure attributable to plant or machinery
Section 171 Disposal values on cessation of ownership
Chapter 14 Fixtures
Introduction
Section 172 Scope of Chapter etc
Section 172A Long funding leases etc: cases where this Chapter does not apply
Section 173 Meaning of “fixture” and “relevant land”
Section 174 Meaning of “equipment lease” and “lease”
Section 175 Meaning of “interest in land”, etc
Section 175A Meaning of “energy services agreement”
Persons who are treated as owners of fixtures
Section 176 Person with interest in relevant land having fixture for purposes of qualifying activity
Section 177 Equipment lessors
Section 178 Equipment lessee has qualifying activity etc
Section 179 Equipment lessor has right to sever fixture that is not part of building
Section 180 Equipment lease is part of affordable warmth programme
Section 180A Energy services providers
Section 181 Purchaser of land giving consideration for fixture
Section 182 Purchaser of land discharging obligations of equipment lessee
Section 182A Purchaser of land discharging obligations of client under energy services agreement
Section 183 Incoming lessee where lessor entitled to allowances
Section 184 Incoming lessee where lessor not entitled to allowances
Restrictions on amount of qualifying expenditure
Section 185 Fixture on which a plant and machinery allowance has been claimed
Section 186 Fixture on which an industrial buildings allowance has been made
Section 187 Fixture on which a research and development allowance has been made
Cessation of ownership of fixtures
Section 188 Cessation of ownership when person ceases to have qualifying interest
Section 189 Identifying the qualifying interest in special cases
Section 190 Cessation of ownership of lessor where section 183 applies
Section 191 Cessation of ownership on severance of fixture
Section 192 Cessation of ownership of equipment lessor
Section 192A Cessation of ownership of energy services provider
Acquisition of ownership of fixture when another ceases to own it
Section 193 Acquisition of ownership by lessor or licensor on termination of lease or licence
Section 194 Acquisition of ownership by assignee of equipment lessor
Section 195 Acquisition of ownership by equipment lessee
Section 195A Acquisition of ownership by assignee of energy services provider
Section 195B Acquisition of ownership by client
Disposal values
Section 196 Disposal values in relation to fixtures: general
Section 197 Disposal values in avoidance cases
Election to fix apportionment
Section 198 Election to apportion sale price on sale of qualifying interest
Section 199 Election to apportion capital sum given by lessee on grant of lease
Section 200 Elections under sections 198 and 199: supplementary
Section 201 Elections under sections 198 and 199: procedure
Further provisions
Section 202 Interpretation
Section 203 Amendment of returns etc
Section 204 Appeals etc
Chapter 15 Asset provided or used only partly for qualifying activity
Section 205 Reduction of [annual investment allowance and] first-year allowances
Section 206 Single asset pool etc
Section 207 Reduction of allowances and charges on expenditure in single asset pool
Section 208 Effect of significant reduction in use for purposes of qualifying activity
Section 208A Cars: disposal value in avoidance cases
Chapter 16 Partial depreciation subsidies
Section 209 Meaning of “partial depreciation subsidy”
Section 210 Reduction of [annual investment allowance and] first-year allowances
Section 211 Single asset pool etc
Section 212 Reduction of allowances and charges on expenditure in single asset pool
Chapter 17 Anti-avoidance
Relevant transactions
Section 213 Relevant transactions: sale, hire-purchase (etc) and assignment
Restrictions on allowances
Section 214 Connected persons
Section 215 Transactions to obtain allowances
Section 216 Sale and leaseback, etc
Section 217 No [annual investment allowance or] first-year allowance for B’s expenditure
Section 218 Restriction on B’s qualifying expenditure
Section 218A Further restriction on annual investment allowance
Finance leases and certain operating leases
Section 219 Meaning of “finance lease”
Section 220 Allocation of expenditure to a chargeable period
Sale and finance leasebacks
Section 221 Meaning of “sale and finance leaseback”
Section 222 Disposal value restricted
Section 223 No first-year allowance for B’s expenditure
Section 224 Restriction on B’s qualifying expenditure
Section 225 B’s qualifying expenditure if lessor not bearing non-compliance risk
Section 226 Qualifying expenditure limited in subsequent transactions
Sale and leaseback or sale and finance leaseback: election for special treatment
Section 227 Circumstances in which election may be made
Section 228 Effect of election: relaxation of restriction on B’s qualifying expenditure, etc
Finance leaseback: parties' income and profits
Section 228A [Application of sections 228B to 228C]
Section 228B [S's income or profits [etc]: deductions]
Section 228C [S's income or profits: termination of leaseback]
Section 228D Lessor’s income or profits
Section 228E Lessor’s income or profits: termination of leaseback
Section 228F Lease and finance leaseback
Section 228G [Leaseback not accounted for as finance lease in S’s accounts]
Section 228H Sections 228A to 228G: supplementary
Section 228J Plant or machinery subject to further operating lease
Disposal of plant or machinery subject to lease where income retained
Section 228K Disposal of plant or machinery subject to lease where income retained
Section 228L Determining the net present value of the rentals for purposes of s 228K
Section 228M Other definitions for the purposes of s 228K
Miscellaneous and supplementary
Section 229 Hire-purchase etc
Section 229A Transfer followed by hire-purchase etc: restrictions on hirer's allowances
Section 230 Exception for manufacturers and suppliers
Section 231 Adjustments of assessments etc
Section 232 Meaning of connected person
Section 233 Additional VAT liabilities and rebates
Chapter 18 Additional VAT liabilities and rebates
Introduction
Section 234 Introduction
Additional VAT liability
Section 235 Additional VAT liability treated as qualifying expenditure
Section 236 Additional VAT liability generates first-year allowance [or annual investment allowance]
Section 237 Exceptions to section 236
Additional VAT rebate
Section 238 Additional VAT rebate generates disposal value
Section 239 Limit on disposal value where additional VAT rebate
Short-life assets: balancing allowance
Section 240 Additional VAT liability
Anti-avoidance
Section 241 No [annual investment allowance or] first-year allowance in respect of additional VAT liability
Section 242 Restriction on B’s qualifying expenditure: general
Section 243 Restriction on B’s qualifying expenditure: sale and finance leaseback
Section 244 B’s qualifying expenditure if lessor not bearing non-compliance risk
Section 245 Effect of election under section 227 on additional VAT liability
Section 246 Miscellaneous
Chapter 19 Giving effect to allowances and charges
Trades
Section 247 Trades
Property businesses
Section 248 Ordinary [property] businesses
Section 249 Furnished holiday lettings businesses
Section 250 Overseas property businesses
Activities analogous to trades
Section 251 Professions and vocations
Section 252 Mines, transport undertakings etc
Companies with investment business
Section 253 [Companies with investment business]
Life assurance business
Section 254 Introductory
Section 255 Apportionment of allowances and charges
Section 256 Different giving effect rules for different categories of business
Section 257 Supplementary
Friendly societies
Section 257A Apportionment of allowances and charges
Special leasing of plant or machinery
Section 258 Special leasing: income tax
Section 259 Special leasing: corporation tax (general)
Section 260 Special leasing: corporation tax (excess allowance)
Section 261 Special leasing: life assurance business
Section 261A Special leasing: leasing partnerships
Employments and offices
Section 262 Employments and offices
Section 262A First-year tax credits
First-year tax credits
Chapter 20 Supplementary provisions
Partnerships and successions
Section 263 Qualifying activities carried on in partnership
Section 264 Partnership using property of a partner
Section 265 Successions: general
Section 266 Election where predecessor and successor are connected persons
Section 267 Effect of election
Section 267A Restriction on effect of election
Section 268 Successions by beneficiaries
Cars etc.
Section 268A Meaning of “car” and “motor cycle”
Section 268B Electrically-propelled vehicles
Section 268C Terms relating to emissions
Section 268D Hire cars for disabled persons
Miscellaneous
Section 269 Use of plant or machinery for business entertainment
Section 270 Shares in plant or machinery
Part 3 Industrial buildings allowances
Chapter 1 Introduction
Section 271 Industrial buildings allowances
Section 272 Expenditure on the construction of a building
Section 273 Preparation of sites for plant or machinery
Chapter 2 Industrial buildings
Buildings in use for the purposes of a qualifying trade
Section 274 Trades and undertakings which are “qualifying trades”
Section 275 Building used for welfare of workers
Section 276 Parts of trades and undertakings
Section 277 Exclusion of dwelling-houses, retail shops, showrooms, hotels and offices etc
Section 278 Building used by more than one licensee
Qualifying hotels and sports pavilions
Section 279 Qualifying hotels
Section 280 Qualifying sports pavilions
Commercial buildings (enterprise zones)
Section 281 Commercial buildings (enterprise zones)
Supplementary provisions
Section 282 Buildings outside the United Kingdom
Section 283 Non-industrial part of building disregarded
Section 284 Roads on industrial estates etc
Section 285 Cessation of use and temporary disuse of building
Chapter 3 The relevant interest in the building
Section 286 General rule as to what is the relevant interest
Section 287 Interest acquired on completion of construction
Section 288 Effect of creation of subordinate interest
Section 289 Merger of leasehold interest
Section 290 Election to treat grant of lease exceeding 50 years as sale
Section 291 Supplementary provisions with respect to elections
Chapter 4 Qualifying expenditure
Introduction
Section 292 Meaning of “qualifying expenditure”
Section 293 Meaning of references to carrying on a trade as a developer
Qualifying expenditure
Section 294 Capital expenditure on construction of a building
Section 295 Purchase of unused building where developer not involved
Section 296 Purchase of building which has been sold unused by developer
Section 297 Purchase of used building from developer
Qualifying enterprise zone expenditure
Section 298 The time limit for qualifying enterprise zone expenditure
Section 299 Application of section 294
Section 300 Application of sections 295 and 296
Section 301 Purchase of building within 2 years of first use
Part of expenditure within time limit for qualifying enterprise zone expenditure
Section 302 Qualifying enterprise zone expenditure where section 295 or 296 applies
Section 303 Purchase of building within 2 years of first use
Section 304 Application of section 303 where developer involved
Chapter 5 Initial allowances
Section 305 Initial allowances for qualifying enterprise zone expenditure
Section 306 Amount of initial allowance and period for which allowance made
Section 307 Building not industrial building when first used etc
Section 308 Grants affecting entitlement to initial allowances
Chapter 6 Writing-down allowances
Section 309 Entitlement to writing-down allowance
Section 310 Basic rule for calculating amount of allowance
Section 311 Calculation of allowance after sale of relevant interest
Section 312 Allowance limited to residue of qualifying expenditure
Section 313 Meaning of “the residue of qualifying expenditure”
Section 313A Calculation of allowance after sale of relevant interest: anti-avoidance
Chapter 7 Balancing adjustments
General
Section 314 When balancing adjustments are made
Section 315 Main balancing events
Section 316 Proceeds from main balancing events
Section 317 Balancing event where hotel not qualifying hotel for 2 years
Calculation of balancing adjustments
Section 318 Building an industrial building etc throughout
Section 319 Building not an industrial building etc throughout
Section 320 Overall limit on balancing charge
Meaning of “the relevant period of ownership” etc.
Section 321 The relevant period of ownership
Section 322 Starting expenditure
Section 323 Adjusted net cost
Section 324 Net allowances
Balancing allowances restricted where sale subject to subordinate interest
Section 325 Balancing allowances restricted where sale subject to subordinate interest
Section 326 Interpretation of section 325
Qualifying enterprise zone expenditure: effect of realising capital value
Section 327 Capital value provisions: application of provisions
Section 328 Balancing adjustment on realisation of capital value
Section 329 Capital value that is attributable to subordinate interest
Section 330 Exception for payments more than 7 years after agreement
Section 331 Capital value provisions: interpretation
Chapter 8 Writing off qualifying expenditure
Section 332 Introduction
Section 333 Writing off initial allowances
Section 334 Writing off writing-down allowances
Section 335 Writing off research and development allowances
Section 336 Writing off expenditure when building not an industrial building
Section 337 Writing off or increase of expenditure where balancing adjustment made
Section 338 Writing off capital value which has been realised
Section 339 Crown or other person not within the charge to tax entitled to the relevant interest
Section 340 Treatment of demolition costs
Chapter 9 Highway undertakings
Section 341 Carrying on of highway undertakings
Section 342 The relevant interest
Section 343 Balancing adjustment on ending of concession
Section 344 Cases where highway concession is to be treated as extended
Chapter 10 Additional VAT liabilities and rebates
Introduction
Section 345 Introduction
Additional VAT liabilities
Section 346 Additional VAT liabilities and initial allowances
Section 347 Additional VAT liabilities and writing-down allowances
Section 348 Additional VAT liabilities and writing off initial allowances
Additional VAT rebates
Section 349 Additional VAT rebates and writing-down allowances
Section 350 Additional VAT rebates and balancing adjustments
Section 351 Additional VAT rebates and writing off qualifying expenditure
Chapter 11 Giving effect to allowances and charges
Section 352 Trades
Section 353 Lessors and licensors
Section 354 Buildings temporarily out of use
Section 355 Buildings for miners etc: carry-back of balancing allowances
Chapter 12 Supplementary provisions
Section 356 Apportionment of sums partly referable to non-qualifying assets
Section 357 Arrangements having an artificial effect on pricing
Section 358 Requisitioned land
Section 359 Provisions applying on termination of lease
Section 360 Meaning of “lease” etc.
Part 3A Business premises renovation allowances
Chapter 1 Introduction
Section 360A Business premises renovation allowances
Chapter 2 Qualifying expenditure
Section 360B Meaning of “qualifying expenditure”
Chapter 3 Qualifying buildings and qualifying business premises
Section 360C Meaning of “qualifying building”
Section 360D Meaning of “qualifying business premises”
Chapter 4 The relevant interest in the qualifying building
Section 360E General rule as to what is the relevant interest
Section 360F Interest acquired on completion of conversion
Chapter 5 Initial Allowances
Section 360G Initial allowances
Section 360H Premises not qualifying business premises or relevant interest sold before premises first used or let
Chapter 6 Writing-down allowances
Section 360I Entitlement to writing-down allowances
Section 360J Amount of allowance
Section 360K Meaning of “the residue of qualifying expenditure”
Chapter 7 Grants in respect of qualifying expenditure
Section 360L Grants affecting entitlement to allowances
Chapter 8 Balancing adjustments
Section 360M When balancing adjustments are made
Section 360N Balancing events
Section 360O Proceeds from balancing events
Section 360P Calculation of balancing adjustments
Chapter 9 Writing off qualifying expenditure
Section 360Q Introduction
Section 360R Writing off initial allowances and writing-down allowances
Section 360S Treatment of demolition costs
Chapter 10 Additional VAT liabilites and rebates
Section 360T Introduction
Section 360U Additional VAT liabilities and initial allowances
Section 360V Additional VAT liabilities and writing-down allowances
Section 360W Additional VAT liabilities and writing off initial allowances
Section 360X Additional VAT rebates and balancing adjustments
Section 360Y Additional VAT rebates and writing off qualifying expenditure
Chapter 11 Supplementary provisions
Section 360Z Giving effect to allowances and charges: trades
Section 360Z1 Giving effect to allowances and charges: lessors and licensees
Section 360Z2 Apportionment of sums partly referable to non-qualifying assets
Section 360Z3 Provisions applying on termination of lease
Section 360Z4 Meaning of “lease” etc.
Part 4 Agricultural buildings allowances
Chapter 1 Introduction
Section 361 Agricultural buildings allowances
Section 362 Meaning of “husbandry”
Section 363 Expenditure on the construction of a building
Chapter 2 The relevant interest
Section 364 General rule as to what is the relevant interest
Section 365 Effect of creation of subordinate lease
Section 366 Interest conveyed or assigned by way of security
Section 367 Merger of leasehold interest
Section 368 Provisions applying on ending of lease
Chapter 3 Qualifying expenditure
Section 369 Capital expenditure on construction of agricultural building
Section 370 Purchase of relevant interest before first use of agricultural building
Section 371 Different relevant interests in different parts of the related agricultural land
Chapter 4 Writing-down allowances
Section 372 Entitlement to writing-down allowance
Section 373 Basic rule for calculating amount of allowance
Section 374 First use of building not for purposes of husbandry, etc
Section 375 Effect of acquisition of relevant interest after first use of building
Section 376 Calculation of allowance after acquisition
Section 377 Chargeable period when balancing adjustment made
Section 378 Allowance limited to residue of qualifying expenditure
Section 379 Final writing-down allowance
Chapter 5 Balancing adjustments
General
Section 380 When balancing adjustments are made
Section 381 Balancing events (on making an election)
Section 382 Requirements as to elections
Section 383 Proceeds from balancing events
Section 384 Exclusion of proportion of proceeds
Calculation of balancing adjustments
Section 385 Calculation of balancing adjustment
Section 386 The residue of qualifying expenditure
Section 387 Overall limit on balancing charge
Section 388 Acquisition of relevant interest in part of land, etc
Section 389 Balancing allowances restricted where sale subject to subordinate interest etc
Section 390 Interpretation of section 389
Chapter 6 Supplementary provisions
Giving effect to allowances and charges
Section 391 Trades
Section 392 UK property businesses
Meaning of “freehold interest”, “lease” etc.
Section 393 Meaning of “freehold interest”, “lease”, etc
Part 4A Flat Conversion Allowances
Chapter 1 Introduction
Section 393A Flat conversion allowances
Chapter 2 Qualifying expenditure
Section 393B Meaning of “qualifying expenditure”
Chapter 3 Qualifying buildings and qualifying flats
Section 393C Meaning of “qualifying building”
Section 393D Meaning of “qualifying flat”
Section 393E High value flats
Chapter 4 The relevant interest in the flat
Section 393F General rule as to what is the relevant interest
Section 393G Interest acquired on completion of conversion
Chapter 5 Initial allowances
Section 393H Initial allowances
Section 393I Flat not qualifying flat or relevant interest sold before flat first let
Chapter 6 Writing-down allowances
Section 393J Entitlement to writing-down allowances
Section 393K Amount of allowance
Section 393L Meaning of “the residue of qualifying expenditure”
Chapter 7 Balancing adjustments
Section 393M When balancing adjustments are made
Section 393N Balancing events
Section 393O Proceeds from balancing events
Section 393P Calculation of balancing adjustments
Chapter 8 Writing off qualifying expenditure
Section 393Q Introduction
Section 393R Writing off initial allowances and writing-down allowances
Section 393S Treatment of demolition costs
Chapter 9 Supplementary provisions
Section 393T Giving effect to allowances and charges
Section 393U Apportionment of sums partly referable to non-qualifying assets
Section 393V Provisions applying on termination of lease
Section 393W Meaning of “lease” etc.
Part 5 Mineral extraction allowances
Chapter 1 Introduction
Section 394 Mineral extraction allowances
Section 395 Qualifying expenditure
Section 396 Meaning of “mineral exploration and access”
Section 397 Meaning of “mineral asset”
Section 398 Relationship between main types of qualifying expenditure
Section 399 Expenditure excluded from being qualifying expenditure
Chapter 2 Qualifying expenditure on mineral exploration and access
Section 400 Qualifying expenditure on mineral exploration and access
Section 401 Pre-trading exploration expenditure
Section 402 Pre-trading expenditure on plant or machinery
Chapter 3 Qualifying expenditure on acquiring a mineral asset
Section 403 Qualifying expenditure on acquiring a mineral asset
Section 404 Exclusion of undeveloped market value of land
Section 405 Qualifying expenditure where buildings or structures cease to be used
Section 406 Reduction where premium relief previously allowed
Chapter 4 Qualifying expenditure: second-hand assets
Assets reflecting expenditure on mineral exploration and access
Section 407 Acquisition of mineral asset owned by previous trader
Section 408 Acquisition of oil licence from non-trader
Section 409 Acquisition of other assets from non-traders
Qualifying expenditure on assets limited by reference to historic costs
Section 410 UK oil licence: limit is original licence payment
Section 411 Assets generally: limit is residue of previous trader’s qualifying expenditure
Section 412 Transfers of mineral assets within group: limit is initial group expenditure
Section 413 Transfers of mineral assets within group: supplementary
Chapter 5 Other kinds of qualifying expenditure
Section 414 Expenditure on works likely to become valueless
Section 415 Contribution to buildings or works for benefit of employees abroad
Section 416 Expenditure on restoration within 3 years of ceasing to trade
Chapter 5A First-year qualifying expenditure
General
Section 416A First-year allowances available for certain types of qualifying expenditure
Types of expenditrue that may qualify for first-year allowance
Section 416B Expenditure incurred by company for purposes of a ring fence trade
Supplementary
Section 416C Time when expenditure is incurred
Chapter 6 Allowances and charges
First-year allowances
Section 416D First-year allowances
Section 416E Artificially inflated claims for first-year allowances.
Writing-down and balancing allowances and balancing charges
Section 417 Determination of entitlement or liability
Section 418 Amount of allowances and charges
Unrelieved qualifying expenditure
Section 419 Unrelieved qualifying expenditure
Disposal values
Section 420 Meaning of “disposal receipt”
Section 421 Disposal of, or ceasing to use, asset
Section 422 Use of asset otherwise than for permitted development etc
Section 423 Sections 421 and 422: amount of disposal value to be brought into account
Section 424 Disposal value restricted in case of interest in land
Section 425 Receipt of capital sum
Cases in which a person is entitled to a balancing allowance
Section 426 Pre-trading expenditure
Section 427 Giving up exploration, search or inquiry
Section 428 Ceasing to work mineral deposits
Section 429 Buildings etc for benefit of employees abroad ceasing to be used
Section 430 Disposal of asset, etc
Section 431 Discontinuance of trade
Chapter 7 Supplementary provisions
Section 432 Giving effect to allowances and charges
Section 433 Treatment of demolition costs
Section 434 Time when expenditure incurred
Section 435 Shares in assets
Section 436 Meaning of “development” etc
Part 6 Research and development allowances
Chapter 1 Introduction
Section 437 Research and development allowances
Section 438 Expenditure on research and development
Chapter 2 Qualifying expenditure
Section 439 Qualifying expenditure
Section 440 Excluded expenditure: land
Chapter 3 Allowances and charges
Section 441 Allowances
Section 442 Balancing charges
Section 443 Disposal values and disposal events
Section 444 Disposal events: chargeable period for which disposal value is to be brought into account
Section 445 Costs of demolition
Chapter 4 Additional VAT liabilities and rebates
Section 446 Introduction
Section 447 Additional VAT liability treated as additional expenditure etc
Section 448 Additional VAT rebate generates disposal value
Section 449 Effect on balancing charges of additional VAT rebates in earlier chargeable periods
Chapter 5 Supplementary provisions
Section 450 Giving effect to allowances and charges
Section 451 Sales: time of cessation of ownership
Part 7 Know-how allowances
Chapter 1 Introduction
Section 452 Know-how allowances
Section 453 Know-how as property
Chapter 2 Qualifying expenditure
Section 454 Qualifying expenditure
Section 455 Excluded expenditure
Chapter 3 Allowances and charges
Section 456 Pooling of expenditure
Section 457 Determination of entitlement or liability
Section 458 Amount of allowances and charges
Section 459 Available qualifying expenditure
Section 460 Allocation of qualifying expenditure to pools
Section 461 Unrelieved qualifying expenditure
Section 462 Disposal values
Section 463 Giving effect to allowances and charges
Part 8 Patent allowances
Chapter 1 Introduction
Section 464 Patent allowances
Section 465 Future patent rights
Section 466 Grant of licences
Chapter 2 Qualifying expenditure
Section 467 Qualifying expenditure
Section 468 Qualifying trade expenditure
Section 469 Qualifying non-trade expenditure
Chapter 3 Allowances and charges
Section 470 Pooling of expenditure
Section 471 Determination of entitlement or liability
Section 472 Amount of allowances and charges
Section 473 Available qualifying expenditure
Section 474 Allocation of qualifying expenditure to pools
Section 475 Unrelieved qualifying expenditure
Section 476 Disposal value of patent rights
Section 477 Limit on amount of disposal value
Chapter 4 Giving effect to allowances and charges
Section 478 Persons having qualifying trade expenditure
Section 479 Persons having qualifying non-trade expenditure: income tax
Section 480 Persons having qualifying non-trade expenditure: corporation tax
Chapter 5 Supplementary provisions
Section 481 Anti-avoidance: limit on qualifying expenditure
Section 482 Sums paid for Crown use etc treated as paid under licence
Section 483 Meaning of “income from patents”
Part 9 Dredging allowances
Qualifying expenditure on dredging, etc.
Section 484 Dredging allowances
Section 485 Qualifying expenditure
Section 486 Pre-trading expenditure of qualifying trades, etc
Writing-down and balancing allowances
Section 487 Writing-down allowances
Section 488 Balancing allowances
Giving effect to allowances
Section 489 Giving effect to allowances
Part 10 Assured tenancy allowances
Chapter 1 Introduction
Section 490 Assured tenancy allowances
Section 491 Allowances available in relation to old expenditure only
Section 492 Meaning of “approved body”
Section 493 Expenditure on the construction of a building
Chapter 2 The relevant interest
Introduction
Section 494 Introduction
The relevant interest in the building
Section 495 General rule as to what is the relevant interest in the building
Section 496 Interest acquired on completion of construction
Section 497 Effect of creation of subordinate interest
Section 498 Merger of leasehold interest
Section 499 Provisions applying on termination of lease
The relevant interest in the dwelling-house
Section 500 The relevant interest in the dwelling-house
Chapter 3 Qualifying expenditure
Section 501 Capital expenditure on construction
Section 502 Purchase of unused dwelling-house where developer not involved
Section 503 Purchase of dwelling-house sold unused by developer
Chapter 4 Qualifying dwelling-houses
Section 504 Requirements relating to the landlord
Section 505 Qualifying dwelling-houses: exclusions
Section 506 Dwelling-house ceasing to be qualifying dwelling-house
Chapter 5 Writing-down allowances
Entitlement to and calculation of writing-down allowances
Section 507 Entitlement to writing-down allowance
Section 508 Basic rule for calculating amount of allowance
Section 509 Calculation of allowance after sale of relevant interest
Section 510 Allowance limited to residue of qualifying expenditure attributable to dwelling-house
Interpretation
Section 511 Qualifying expenditure attributable to dwelling-house
Section 512 Residue of qualifying expenditure attributable to dwelling-house
Chapter 6 Balancing adjustments
General
Section 513 When balancing adjustments are made
Section 514 Balancing events
Section 515 Proceeds from balancing events
Calculation of balancing adjustments
Section 516 Dwelling-house a qualifying dwelling-house throughout
Section 517 Dwelling-house not a qualifying dwelling-house throughout
Section 518 Overall limit on balancing charge
Section 519 Recovery of old initial allowances made on incorrect assumptions
Meaning of “the relevant period of ownership” etc.
Section 520 The relevant period of ownership
Section 521 Starting expenditure
Section 522 Adjusted net cost
Chapter 7 Writing off qualifying expenditure attributable to dwelling-house
Section 523 Introduction
Section 524 Writing off initial allowances
Section 525 Writing off writing-down allowances
Section 526 Writing off expenditure for periods when building not used as qualifying dwelling-house
Section 527 Writing off or increase of expenditure where balancing adjustment made
Section 528 Treatment of demolition costs
Chapter 8 Supplementary provisions
Section 529 Giving effect to allowances and charges
Section 530 Apportionment of sums partly referable to non-qualifying assets
Section 531 Meaning of “dwelling-house”, “lease” etc
Part 11 Contributions
Chapter 1 Exclusion of expenditure met by contributions
Rules excluding contributions
Section 532 The general rule excluding contributions
Section 533 Exclusion of contributions to dredging
Exceptions to the general rule excluding contributions
Section 534 Northern Ireland regional development grants
Section 535 Insurance or compensation money
Section 536 Contributions not made by public bodies and not eligible for tax relief
Chapter 2 Contribution allowances
Contribution allowances under Parts 2 to 5
Section 537 Conditions for contribution allowances under [Parts 2, 3, 4 and 5]
Section 538 Plant and machinery
Section 539 Industrial buildings
Section 540 Agricultural buildings
Section 541 Mineral extraction
Effect of transfers of C’s trade on contribution allowances under Parts 3, 4 and 5
Section 542 Transfer of C’s trade or relevant activity
Contribution allowances under Part 9
Section 543 Contribution allowances under Part 9
Part 12 Supplementary provisions
Chapter 1 Life assurance business
Section 544 Management assets
Section 545 Investment assets
Chapter 2 Additional VAT liabilities and rebates: interpretation, etc.
Section 546 Introduction
Section 547 “Additional VAT liability” and “additional VAT rebate”
Section 548 Time when additional VAT liability or rebate is incurred or made
Section 549 Chargeable period in which, and time when, additional VAT liability or rebate accrues
Section 550 Apportionment of additional VAT liabilities and rebates
Section 551 Supplementary
Chapter 3 Disposals of oil licences: provisions relating to Parts 5 and 6
Introduction
Section 552 Meaning of “oil licence” and “interest in an oil licence”
Oil licences relating to undeveloped areas
Section 553 Consideration to be treated as nil
Section 554 Circumstances in which oil licence relates to undeveloped area
Disposal of oil licence with exploitation value
Section 555 Disposal of oil licence with exploitation value
Minor definitions
Section 556 Minor definitions
Chapter 4 Partnerships, successions and transfers
Section 557 Application of sections 558 and 559
Section 558 Effect of partnership changes
Section 559 Effect of successions
Section 560 Transfer of insurance company business
Section 561 Transfer or division of UK business
Section 561A Transfer of asset by reason of cross-border merger
Chapter 5 Miscellaneous
Apportionment
Section 562 Apportionment where property sold together
Procedure for determining certain questions
Section 563 Procedure for determining certain questions affecting two or more persons
Section 564 Questions to which procedure in section 563 applies
Tax agreements for income tax purposes
Section 565 Tax agreements for income tax purposes
Companies not resident in the United Kingdom
Section 566 Companies not resident in the United Kingdom
Sales treated as being for alternative amount
Section 567 Sales treated as being for alternative amount: introductory
Section 568 Sales treated as being at market value
Section 569 Election to treat sale as being for alternative amount
Section 570 Elections: supplementary
Anti-avoidance
Section 570A Avoidance affecting proceeds of balancing event
Chapter 6 Final provisions
Orders and regulations
Section 570B Orders and regulations made by Treasury or Commissioners
General interpretation
Section 571 Application of Act to parts of assets
Section 577 Other definitions
Section 572 References to sale of property and time of sale
Section 573 Transfers treated as sales
Section 574 Meaning of “control”
Section 575 Meaning of “connected” persons
Section 575A Section 575: supplementary
Section 576 Meaning of “the Inland Revenue” etc
Amendments, repeals, citation etc.
Section 578 Consequential amendments
Section 579 Commencement and transitional provisions and savings
Section 580 Repeals
Section 581 Citation
Schedules
Schedule A1 First-year Tax Credits
Part 1 Entitlement to First-Year Tax Credits
Part 2 Giving Effect to First-Year Tax Credits
Part 3 Clawback of First-Year Tax Credit
Part 4 Supplementary
Schedule 1 Abbreviations and defined expressions
Part 1 Abbreviations
Part 2 Defined Expressions
Schedule 2 Consequential Amendments
Schedule 3 Transitionals and Savings
Part 1 Continuity of the law
Part 2 Changes in the law
Part 3 General
Part 4 Plant and machinery allowances
Part 5 Industrial buildings allowances
Part 6 Agricultural buildings allowances
Part 7 Mineral extraction allowances
Part 8 Research and development allowances
Part 9 Patent allowances
Part 10 Dredging allowances
Part 11 Contributions
Part 12 Supplemental
Part 13 Other enactments
Schedule 4 Repeals