Capital Allowances Act 2001 section 42

Exclusion of plant or machinery partly for use outside Northern Ireland

Section 42 prevents first-year allowance claims on plant or machinery where part of the expenditure relates to intended use outside Northern Ireland and the arrangements are motivated by obtaining a tax advantage.

• Plant or machinery intended partly for use outside Northern Ireland may lose its first-year qualifying expenditure status under section 40.
• The exclusion applies where a main benefit of the arrangements is obtaining a first-year allowance (or a larger one) on the portion of expenditure linked to use outside Northern Ireland.
• "Relevant arrangements" covers both the transaction itself and any wider scheme of which it forms part.
• The portion of expenditure attributable to use outside Northern Ireland must be determined on a just and reasonable basis.