Capital Allowances Act 2001 section 139

Amount taken into account in respect of old ship

Section 139 determines how to calculate the amount of any balancing charge that is deemed to relate to the old ship when a shipowner seeks to defer that charge, ensuring that only the balancing charge genuinely attributable to the qualifying ship can be deferred.

• Where all expenditure on the ship stayed in a single ship pool (no election to use the non-ship pool), the relevant amount ("Amount A") is simply the disposal value brought into the non-ship pool minus the available qualifying expenditure allocated to that pool.
• Where some or all expenditure was allocated to the non-ship pool, a notional calculation ("Amount B") is used instead, applying the formula: Disposal Value minus (Qualifying Expenditure minus Writing-Down Allowances minus First-Year Allowances), assuming the ship's expenditure was the only expenditure ever in that pool.
• The writing-down allowances used in Amount B are the maximum that could have been claimed up to (but not including) the period in which deferment is claimed, and first-year allowances include those actually made or postponed.
• If an election to use the non-ship pool is made after the amount has already been determined under this section, Amount B automatically replaces Amount A and is treated as having always applied, with any necessary assessment adjustments made accordingly.