Capital Allowances Act 2001 section 141

Deferred amounts attributed to earlier expenditure first

Section 141 requires that when a shipowner has deferred a balancing charge and subsequently spends money on new shipping, the deferred amount must be attributed to expenditure in chronological order — earliest qualifying expenditure first — rather than allowing the shipowner to choose which expenditure to match it against.

• A deferred balancing charge amount cannot be attributed to later expenditure on new shipping if there is earlier qualifying expenditure that has not yet been fully matched with deferred amounts.
• Earlier expenditure includes spending by the shipowner or by another company in the same group, provided it was incurred at the same time as or after the disposal event that triggered the deferral.
• Expenditure that would qualify as new shipping expenditure but for an election to use a non-ship pool is also treated as earlier expenditure for these purposes.
• The restriction is lifted only once all earlier expenditure has been fully attributed with deferred amounts — including amounts deferred from disposal events occurring at the same time as or before the relevant disposal.