Capital Allowances Act 2001 section 439A

Qualifying expenditure incurred for purposes of NI rate activity

Section 439A deals with how qualifying expenditure is treated when a company or partnership that previously had no Northern Ireland regional establishment later acquires one, so that expenditure originally incurred outside the Northern Ireland regime can be brought into account for the purposes of the lower Northern Ireland corporation tax rate.

• Where a company without a Northern Ireland regional establishment incurs trade expenditure that would qualify as NI rate activity expenditure, and the company later becomes a NIRE company, the expenditure is treated as incurred on the first day of the first chargeable period in which the company is a NIRE company.
• The same re-dating rule applies to partnerships: if a partnership without a Northern Ireland regional establishment incurs qualifying trade expenditure and later becomes a Northern Ireland Chapter 7 firm, the expenditure is similarly treated as incurred on the first day of the first chargeable period in which that status is acquired.
• The effect is that capital allowances on the re-dated expenditure become available only from the point at which the company or partnership establishes a qualifying Northern Ireland presence, not from the date the expenditure was actually incurred.
• The term "Northern Ireland regional establishment" takes its meaning from Part 8B of the Corporation Tax Act 2010, including the specific adaptations that apply when the entity in question is a partnership.