Capital Allowances Act 2001 section 123

Ships and aircraft

Section 123 sets out additional circumstances in which a ship or aircraft that is let on charter can still be treated as being used for a qualifying purpose for capital allowances.

• A ship let on charter is used for a qualifying purpose where the operator is UK-resident or trades in the UK, and retains responsibility for navigation, management and expenses throughout the charter period
• The same rules apply to aircraft, with necessary modifications
• Responsibility can be fulfilled either as principal or by appointing another person to act in one's place
• The qualifying purpose treatment is denied if the main object (or one of the main objects) of the charter arrangement or any related series of transactions was to obtain a writing-down allowance at the standard rate rather than the restricted 10% rate