Capital Allowances Act 2001 section 439

Qualifying expenditure

Section 439 defines what counts as qualifying expenditure on research and development for the purposes of capital allowances, including the conditions that must be met and how the expenditure relates to a trade.

• Capital expenditure on research and development qualifies if the person is already trading and the R&D relates to that trade, or if they subsequently set up a trade connected with the R&D.
• The same expenditure cannot be treated as qualifying expenditure for more than one trade, and the trade to which it relates is called "the relevant trade."
• Where expenditure only partly qualifies, it must be apportioned on a just and reasonable basis.
• R&D related to a trade includes work that may extend that trade, as well as medical research with a special relation to the welfare of workers employed in the trade.