5(1)In subsection (1) of section 59 (disposal value of fixtures determined in accordance with subsections (2) to (6)), after “determined” there shall be inserted “(subject to sections 59A and 59B)”.
(2)In Chapter VI of Part II, after that section there shall be inserted the following section—
(1)If, in a case where machinery or plant has been treated by virtue of this Chapter as belonging to any person (“the charged person”) in consequence of his incurring any expenditure—
(a)an event occurs by reason of which a disposal value of that machinery or plant is to be brought into account by the charged person in accordance with section 24,
(b)the amount of the disposal value to be so brought into account would (but for this section) be less than the notional written-down value of the machinery or plant, and
(c)the event is comprised in, or occurs in pursuance of, any scheme or arrangement which has avoidance as its main object, or as one of its main objects,
this Part shall have effect in relation to the charged person as if the amount of the disposal value to be brought into account were equal to the notional written-down value of the machinery or plant.
(2)In this section “the notional written-down value”, in relation to any machinery or plant, means the amount which, if—
(a)it were the disposal value falling to be brought into account as mentioned in subsection (1) above, and
(b)the assumptions set out in subsection (3) below were made,
would give rise to neither a balancing allowance nor a balancing charge for the chargeable period for which that disposal value is to be brought into account.
(3)Those assumptions are—
(a)that expenditure on the provision of the machinery or plant were the only expenditure ever taken into account in determining the charged person’s qualifying expenditure for the purposes of section 24; and
(b)that the full amount of every allowance to which that person was entitled in respect of that expenditure had been made to him.
(4)The reference in subsection (1) above to avoidance is a reference to—
(a)the obtaining under this Part for the charged person of an allowance or deduction or of a greater allowance or deduction, or
(b)the avoidance or reduction of a charge under this Part on the charged person.”
(3)This paragraph has effect for chargeable periods ending on or after 24th July 1996 wherever the time of the occurrence of the event by virtue of which the disposal value falls to be brought into account is a time on or after that date.