Capital Allowances Act 2001 section 45Q

Exclusion of plant or machinery partly for use outside freeport tax sites

Section 45Q prevents companies from claiming enhanced freeport first-year allowances on the portion of expenditure that relates to plant or machinery intended for use outside a freeport tax site, where obtaining such allowances is one of the main purposes of the arrangements.

• Where a company intends plant or machinery to be used partly outside a freeport tax site, the expenditure attributable to that non-freeport use (the "non-freeport part") may be excluded from enhanced first-year allowances.
• The exclusion applies when one of the main purposes of the arrangements is to obtain a first-year allowance, or a larger first-year allowance, in respect of the non-freeport part of the expenditure.
• The split between freeport and non-freeport expenditure must be determined on a just and reasonable basis.
• The "relevant arrangements" include both the transaction under which the expenditure is incurred and any wider scheme or arrangements of which that transaction forms part.