Capital Allowances Act 2001 section 59C

Sections 59A and 59B: tax avoidance arrangements

Section 59C is an anti-avoidance provision that counteracts arrangements designed to avoid, reduce, or alter the timing of balancing charges arising under sections 59A and 59B when assets that benefited from full expensing first-year allowances are disposed of.

• This section applies where arrangements have a main purpose of avoiding a balancing charge under section 59A or 59B, or of reducing the amount or changing the timing of such a charge.
• Where the section applies, sections 59A and 59B take effect as though the avoidance arrangements had never been entered into, restoring the balancing charge that would otherwise have arisen.
• The definition of "arrangements" is deliberately broad, covering any agreement, understanding, scheme, transaction, or series of transactions, whether or not they are legally enforceable.
• The provision ensures that the intended tax consequences of disposing of assets that received full expensing first-year allowances cannot be circumvented through contrived planning.