Capital Allowances Act 2001 section 486

Pre-trading expenditure of qualifying trades, etc

Section 486 deals with the timing of capital expenditure on dredging that is incurred before a qualifying trade begins or before the relevant premises are occupied, by deeming it to have been incurred at a later date.

• Capital expenditure incurred with a view to carrying on a trade is treated as incurred on the first day the trade (or relevant part of the trade) actually begins.
• Capital expenditure connected with a dock or other premises, incurred before they are occupied for a qualifying trade, is treated as incurred when the person first occupies those premises for the trade.
• Where expenditure is incurred before both the trade has started and the premises are occupied, the expenditure is treated as incurred only when both conditions are met — the trade is being carried on and the premises are occupied.
• This timing rule applies specifically to qualifying trades that fall outside the category of trades carried on by dock undertakers or navigation authorities (i.e. those not within section 484(2)(a)).