Capital Allowances Act 2001 section 110

Cases where allowances are prohibited

Section 110 prohibits writing-down and balancing allowances for expenditure on plant or machinery leased overseas where certain lease characteristics are present.

• No writing-down or balancing allowances are available where plant or machinery is acquired for leasing, used for non-protected overseas leasing during the designated period, and not used for a qualifying purpose
• Allowances are prohibited where the lease term exceeds 13 years (whether directly or through extension, renewal or new lease provisions)
• Allowances are also prohibited where lease payment patterns are irregular — for example, gaps of more than a year between payments, non-periodical payments, or unequal monthly amounts (subject to permitted variations)
• Allowances are further prohibited where the lessor or a connected person may receive a non-insurance payment, determined before lease expiry, linked to the value of the plant or machinery at or after the lease ends