Capital Allowances Act 2001 section 147

Exclusions: ship previously owned

Section 147 prevents expenditure on a ship from qualifying as "new shipping" expenditure for the purposes of deferring a balancing charge, where the ship has previously been owned by the same person or by a connected party within the preceding six years.

• Expenditure on a ship does not qualify as new shipping expenditure if the buyer has already owned that same ship at any time in the six years before reacquiring it.
• The exclusion also applies if, during that six-year period, the ship was owned by a person connected with the buyer at a material time.
• A "material time" means either the time the expenditure was incurred, or any earlier time in the six-year period beginning with the relevant disposal event that gave rise to the deferred balancing charge.
• The definition of a "connected person" is set out in section 187 of the Capital Allowances Act 2001.