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Capital Allowances Act 2001

Section 142: Variation of attribution

550.This section is based on section 33F(4) and (4A) of CAA 1990. It lets a shipowner vary an attribution. This gives the shipowner an element of choice as to which ship a deferred amount is attributed. That can be of benefit to taxpayers if two (or more) ships are acquired simultaneously.

  • Example

  • A has deferred a balancing charge of £1m arising in respect of the disposal of a ship on 20 August 2001. On 7 October 2002, A acquires two new ships, S1 and S2 for £500,000 and £750,000 respectively. A initially attributes £500,000 of the deferred amount to both of the new ships.

  • On 24 March 2003, A sells S1 for £500,000. As a result of the original claim for deferment, this sale will give rise to a further balancing charge of £500,000. A does not expect to incur any further expenditure on shipping. As a result, A will not be able to defer any of this amount. However, provided A does so within the time limits provided by this section, A can vary the original attribution to maximise the amount attributed to S2 (in other words to £750,000 leaving only £250,000 attributed to S1).

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