Capital Allowances Act 2001 section 45T

Exclusion of expenditure incurred under disqualifying arrangements

Section 45T prevents expenditure from qualifying for the full expensing first-year allowance under section 45S where the expenditure is connected with arrangements designed to exploit the relief for tax advantage purposes.

• Expenditure connected directly or indirectly with disqualifying arrangements cannot qualify as first-year qualifying expenditure under section 45S
• Arrangements are disqualifying if a main purpose is to secure a tax advantage from the full expensing relief, including avoiding or reducing balancing charges
• The arrangements must also be contrived, abnormal, lacking genuine commercial purpose, or circumventing the intended limits of the relief
• Arrangements are broadly defined to include any agreement, understanding, scheme, transaction or series of transactions, whether or not legally enforceable