Capital Allowances Act 2001 Schedule 3 paragraph 44

Hire purchase etc. and finance leases

Paragraph 44 of Schedule 3 provides a transitional rule that exempts certain older expenditure from the anti-avoidance provisions in sections 220 and 229 relating to finance leases and hire purchase arrangements.

• Sections 220 (allocation of expenditure for finance leases) and 229 (hire purchase etc.) contain anti-avoidance rules for plant and machinery allowances
• These rules do not apply to any expenditure incurred before 2 July 1997
• They also do not apply to expenditure incurred in the 12 months from 2 July 1997, provided the expenditure was made under a contract entered into before that date
• This transitional protection ensures that existing contractual commitments made before the rules took effect are not retrospectively caught by the anti-avoidance provisions