1657.This Chapter defines “qualifying expenditure”. There are two types of qualifying expenditure. The way in which allowances are given in respect of the two types is different.
1658.Section 467 sets out the two types of qualifying expenditure.
1659.Section 468 deals with qualifying trade expenditure.
1660.Section 469 deals with non-trade qualifying expenditure.
1661.This section introduces the two types of qualifying expenditure. The main difference between them is in the way allowances and charges are given effect in Chapter 4.
1662.This section is based on sections 520(1), (2)(a) and (3), 528(1) and 532(1) of ICTA and section 161(3) of CAA 1990. It defines “qualifying trade expenditure”.
1663.Subsection (1) incorporates the effect of section 161(3) of CAA 1990. See Note 74 in Annex 2.
1664.Subsection (2) prevents capital allowances being given more than once on the same qualifying expenditure. This is to make the point explicit. See Note 59 in Annex 2.
1665.Subsection (3) treats qualifying expenditure incurred before the trade starts as if it was incurred when the trade starts.
1666.Subsection (4) prevents subsection (3) applying if a person sells all of the patent rights before the trade starts.
1667.This section is based on section 520(2)(b) of ICTA. It defines “qualifying non-trade expenditure”.