Corporation Tax Act 2010 section 356CAA

Expenditure on acquisition of asset: further disqualifying conditions

Section 356CAA sets out additional conditions under which capital expenditure on acquiring an asset will be denied onshore allowance relief, preventing the same asset from attracting relief more than once.

• Capital expenditure on acquiring an asset cannot qualify for onshore allowance relief if previous spending on that asset (by the same or another company) has already been relieved under section 356C
• Relief is also denied where the asset is a licence interest (or related asset) in a qualifying site and prior expenditure on it would have qualified for relief had the onshore allowance regime been in force at the time
• A further disqualification arises where earlier expenditure on the asset has become (or could become) relievable through an election under section 356CB, which allows expenditure not initially linked to a specific site to be allocated to one
• These rules look at the substance of when expenditure was actually incurred, and apply even where no election under section 356CB has been or could be made in practice