Chapter 2: Exclusion of double relief
Overview
61.This Chapter contains provisions designed to prevent allowances being claimed twice in respect of the same expenditure under different Parts.
62.The Chapter also provides a special rule applying to claims for allowances in respect of fixtures. The general effect of the rules in this Chapter is that different people can claim allowances under different Parts in respect of an asset – for example successive owners. But this does not apply for fixtures. In such cases, one person’s claim binds a subsequent claimant.
Section 7: No double allowances
63.This section is based on part of section 147(1) and (2) of CAA 1990. It prevents allowances from being claimed under one Part if an allowance has been made under another Part in respect of the same capital expenditure.
64.Subsection (1)(b) extends this and prevents allowances from being claimed under different Parts in respect of expenditure on the same asset.
65.Before this Act, patents and know-how allowances were dealt with in ICTA rather than CAA 1990. As a result, they are not covered by section 147 of CAA 1990. Subsection (2) replicates this exclusion by excluding Parts 7 and 8 from the rule in this section. In practice, however, this is likely to be of little effect since it is extremely unlikely (even if possible) that expenditure qualifying for allowances under either of these Parts would also qualify for allowances under any other Part. See Note 6 in Annex 2.
Section 8: No double relief through pooling under Part 2 (plant and machinery allowances)
66.This section is also based on part of section 147(1) and (2) of CAA 1990. It caters for the fact that, if expenditure on plant or machinery has been allocated to a pool, it is not possible to state that an allowance has been made in respect of the expenditure itself even though an allowance may have been made in respect of the pool.
67.Chapter 5 of Part 2 sets out how expenditure on plant and machinery is pooled to arrive at allowances and charges. See also the commentary on Part 2, paragraphs 93 and 94 below.
68.Subsections (1) and (2) extend section 7 to deal with cases in which, under Part 2, capital expenditure has been allocated to a pool and an allowance or charge has been made in respect of that pool. In such cases, allowances are not available under any other Part (other than Parts 7 and 8) in respect of that expenditure (or on the provision of a related asset).
69.Subsections (3) and (4) extend section 7 to deal with cases in which an allowance has been made in respect of capital expenditure under a Part other than Part 2. In such cases, that expenditure (or any expenditure on the provision of a related asset) may not also be allocated to a pool under Part 2.
70.Subsection (5) makes it clear that this section does not apply to Part 7 or 8. Again, see Note 6 in Annex 2.
71.CAA 1990 refers to taking “expenditure into account” for the purposes of the plant and machinery rules. This section is more direct in its approach and refers to expenditure being allocated to a pool and allowances or charges being made. However, there is no change effected by use of these different words.
Section 9: Interaction between fixtures claims and other claims
72.This section is based on section 147(2A), (2B) and (2C) and part of section 147(2D) of CAA 1990. It prevents a person from making a claim under one Part in respect of a fixture if a claim for an allowance has been made under another Part in respect of the same fixture. This applies even if the two claims are made by different persons or in respect of different expenditure.
73.Subsection (1) provides the rule that prevents a fixtures claim being made if a claim has been made under a Part other than Part 2.
74.Subsection (2) relaxes this rule if the earlier claim is made under Part 3 or 6 and section 186 or 187 applies.
75.Subsection (3) provides the mirror image of the rule in subsection (1). If, in respect of an asset, a fixture claim has been made then no person may claim an allowance under any other Part in respect of capital expenditure relating to that asset.
76.Subsection (4) explains what is meant by “a fixtures claim”.
Section 10: Interpretation
77.This section is based on part of section 147(4) of CAA 1990. It provides the interpretation of terms used in the Chapter.
