Capital Allowances Act 2001 section 148

Exclusions: object to secure deferment

Section 148 is an anti-avoidance provision that prevents expenditure on a ship from qualifying as expenditure on new shipping where the purpose of the transaction (or transactions) was to defer a balancing charge.

• Expenditure on providing a ship does not count as new shipping expenditure if the main purpose, or one of the main purposes, was to defer a balancing charge.
• This applies to the specific transaction by which the ship was provided for a qualifying activity, any series of transactions that includes that transaction, or any individual transaction within such a series.
• The balancing charge in question is one that would otherwise arise under section 135 of the Capital Allowances Act 2001, which allows a person to claim deferment of a balancing charge by attributing it to new shipping expenditure.
• The provision is designed to prevent taxpayers from artificially arranging ship purchases solely to take advantage of the balancing charge deferment rules.