Corporation Tax Act 2010 section 992

Harbour reorganisation schemes: capital allowances etc

Section 992 sets out the capital allowances rules that apply when a trade is transferred to a harbour authority under a harbour reorganisation scheme.

• When a trade transfers to a harbour authority under a harbour reorganisation scheme, special capital allowances rules apply to ensure continuity of tax treatment.
• The transfer is treated as if the trade had not ceased in the hands of the transferor and had not newly commenced in the hands of the harbour authority — preserving the ongoing capital allowances position.
• Any plant, machinery or other assets used in the trade carry over to the harbour authority at their existing tax written-down values, so no balancing allowances or charges arise solely because of the transfer.
• The harbour authority effectively steps into the shoes of the previous owner for capital allowances purposes, continuing to claim allowances on the same basis as the transferor would have done.