Capital Allowances Act 2001 section 45F

Expenditure on plant and machinery for use wholly in a ring fence trade

Section 45F provides for 100% first-year capital allowances on plant and machinery expenditure incurred by companies engaged wholly in oil and gas ring fence trades.

• Expenditure on plant or machinery used wholly for a ring fence trade qualifies for 100% first-year allowances, provided it was incurred on or after 17 April 2002 by a company
• A ring fence trade is an oil and gas extraction trade subject to the supplementary charge to corporation tax under section 330(1) of the Corporation Tax Act 2010
• The expenditure must not fall within the general exclusions that apply to first-year allowances
• If the plant or machinery is used in the ring fence trade for less than five years, there are clawback provisions that may restrict the first-year allowance