Capital Allowances Act 2001 Schedule 3 paragraph 20

Long-life asset expenditure

Schedule 3 paragraph 20 sets out the transitional rules that protect certain expenditure on long-life assets from being subject to the special long-life asset rules in Chapter 10 of Part 2, primarily by reference to whether the expenditure or the underlying contract pre-dates 26th November 1996.

• Expenditure incurred before 26th November 1996, or before 1st January 2001 under a contract entered into before that date, is excluded from the long-life asset rules.
• Where a seller claimed plant and machinery allowances on an asset without it being treated as long-life asset expenditure (only because of these transitional protections), a purchaser who later acquires that asset also benefits from the same exclusion.
• If a pre-26th November 1996 contract is varied on or after that date, only the expenditure that would have been incurred under the original unvaried contract is protected; any additional expenditure resulting from the variation is not.
• Terms used in paragraph 20 carry the same meaning as in Chapter 10 of Part 2, and in particular "Part 2 claim" is defined by reference to section 103(3).