Electricity Act 1989

Transaction in pursuance of section 68(2)(c) E+W+S

5 (1) Sub-paragraph (2) below applies to any disposal (within the meaning of the [F1 1992 Act]) which is effected, and sub-paragraphs (3) and (4) below apply to any lease which is granted, in pursuance of a provision included in a transfer scheme by virtue of section 68(2) of this Act. E+W+S

(2) A disposal to which this sub-paragraph applies shall be taken for the purposes of the [F1 1992 Act] to be effected for a consideration of such amount as would secure that on the disposal neither a gain nor a loss would accrue to the disponer.

[F2 (3) Section 291(1) of the Capital Allowances Act 2001 (supplementary provisions with respect to elections) shall not prevent the application of section 290 of that Act (election to treat grant of lease exceeding 50 years as sale) where the lease is a lease to which this sub-paragraph applies.]

(4) Where, in the case of any machinery or plant which is a fixture and on the provision of which for the purposes of the transferor’s trade the transferor incurred capital expenditure, a lease of the relevant land (with or without other land) is a lease to which this sub-pargaraph applies—

(a) the lessor shall not be required to bring the disposal value of the machinery or plant into account in accordance with [F3 Chapter 5 of Part 2 of the Capital Allowances Act 2001](writing down allowances and balancing adjustments); and

(b) so far as relating to the bringing of disposal values into account, [F4 Chapters 5 and 14 ofPart 2 of the Capital Allowances Act 2001](capital allowances for fixtures) shall have effect as if—

(i) the capital expenditure incurred by the transferor had been incurred by the lessee on the provision of the machinery or plant wholly and exclusively for the purposes of the lessee’s trade; and

(ii) the machinery or plant had become a fixture, immediately after the grant of the lease.

[F5 (5) In sub-paragraph (4) above “the transferor” means the transferor under the transfer scheme in question and expressions which are used in Chapter 14 of Part 2 of the Capital Allowances Act 2001 have the same meanings as in that Chapter; and in construing that sub-paragraph section 511(2) of the 1988 Act shall be disregarded.]

Annotations:

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Amendments (Textual)

F1 Words in Sch. 11 para. 5 substituted (6.3.1992 with effect for the year 1992-93 and subsequent years of assessment) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 289, 290, Sch. 10 para. 20(3)

F2 Sch. 11 para. 5(3) substituted (22.3.2001 with effect as mentioned in s. 579(1) of the amending Act) by 2001 c. 2, s. 578, Sch. 2 para. 71(1)

F3 Words in Sch. 11 para. 5(4)(a) substituted (22.3.2001 with effect as mentioned in s. 579(1) of the amending Act) by 2001 c. 2, s. 578, Sch. 2 para. 71(2)

F4 Words in Sch. 11 para. 5(4)(b) substituted (22.3.2001 with effect as mentioned in s. 579(1) of the amending Act) by 2001 c. 2, s. 578, Sch. 2 para. 71(3)

F5 Sch. 11 para. 5(5) substituted (22.3.2001 with effect as mentioned in s. 579(1) of the amending Act) by 2001 c. 2, s. 578, Sch. 2 para. 71(4)