Capital Allowances Act 2001 Schedule 3 paragraph 9

Capital expenditure

Schedule 3, paragraph 9 deals with a transitional modification to the definition of capital expenditure under section 4 for expenditure arising before 26th November 1996.

• This paragraph modifies how section 4 defines capital expenditure for older transactions.
• Section 4 subsections (2) and (3) normally refer to both trades and property businesses when determining whether expenditure is capital in nature.
• For any expenditure incurred, or sums paid or received, before 26th November 1996, the words "or property business" are removed from those subsections.
• The effect is that, for pre-26th November 1996 transactions, the capital expenditure test applies only in relation to trades and not property businesses.