Capital Allowances Act 2001 section 43

Effect of plant or machinery subsequently being primarily for use outside Northern Ireland

Section 43 provides a clawback mechanism where plant or machinery that qualified for enhanced first-year allowances as Northern Ireland expenditure under section 40 is subsequently used primarily outside Northern Ireland.

• If plant or machinery is primarily used or held for use outside Northern Ireland at any point during the monitoring period, the expenditure is treated as never having qualified for the enhanced first-year allowance.
• The monitoring period is 5 years from the date the expenditure was incurred where the expenditure exceeds £3.5 million, or 2 years in all other cases.
• The clawback applies not only while the original purchaser owns the asset, but also while it is owned by a connected person at any time during the monitoring period.
• If a clawback is triggered, all necessary assessments and adjustments must be made, and the taxpayer must notify HMRC within 3 months of becoming aware that a return has become incorrect as a result.