Capital Allowances Act 2001

Anti-avoidance provisions

103 Later claims

(1) Subsection (2) applies if—

(a) a person entitled to do so has made a Part 2 claim in respect of expenditure incurred on the provision of plant or machinery, and

(b) the expenditure fell to be treated as long-life asset expenditure for the purposes of the claim.

(2) If—

(a) at any time after making the Part 2 claim, that claimant or another person makes a Part 2 claim in respect of any qualifying expenditure incurred at any time (including a time before the incurring of the expenditure to which the earlier claim relates) on the provision of the same plant or machinery, and

(b) the expenditure to which the later claim relates—

(i) would not (but for this subsection) be treated for the purposes of the later claim as long-life asset expenditure, and

(ii) is not prevented from being long-life asset expenditure by any of sections 93 to 96,

this Part has effect in relation to the later claim as if the expenditure to which it relates were long-life asset expenditure.

(3) A person makes a Part 2 claim in respect of any expenditure if he—

(a) makes a tax return in which the expenditure is taken into account in determining his available qualifying expenditure for the purposes of this Part;

(b) gives notice of an amendment of a tax return which provides for the expenditure to be so taken into account;

(c) makes a claim in any other way for the expenditure to be so taken into account.

104 Disposal value of long-life assets

(1) This section applies if—

(a) section 102 (writing-down allowances at 6%) has had effect in relation to any long-life asset expenditure incurred by a person (“the taxpayer”),

(b) any disposal event occurs in relation to the long-life asset,

(c) the disposal value to be brought into account by the taxpayer would (but for this section) be less than the notional written-down value of the long-life asset, and

(d) the disposal event is part of, or occurs as a result of, a scheme or arrangement the main purpose or one of the main purposes of which is the obtaining by the taxpayer of a tax advantage under this Part.

(2) The disposal value that the taxpayer must bring into account is the notional written-down value of the long-life asset.

(3) The notional written-down value is—

QE - A

where—

• QE is the taxpayer’s expenditure on the plant or machinery that is qualifying expenditure, and

• A is the total of all allowances which could have been made to the taxpayer in respect of that expenditure if—

  (a)

  that expenditure had been the only expenditure that had ever been taken into account in determining his available qualifying expenditure,

  (b)

  that expenditure had not been prevented by the application of a monetary limit from being long-life asset expenditure, and

  (c)

  all allowances had been made in full.