Capital Allowances Act 2001

164 Abandonment expenditure incurred before cessation of ring fence trade

(1) If a person carrying on a ring fence trade incurs abandonment expenditure, he may elect to have a special allowance made to him.

(2) The election—

(a) must be made by notice to the Inland Revenue no later than 2 years after the end of the chargeable period in which the abandonment expenditure is incurred, and

(b) is irrevocable.

(3) The election must specify—

(a) the abandonment expenditure to which it relates, and

(b) any amounts received for the remains of the plant or machinery in question.

(4) If a person makes an election under this section—

(a) he is entitled to a special allowance, of an amount equal to the net abandonment cost, for the chargeable period in which the abandonment expenditure is incurred, and

(b) section 26(3) (net cost of demolition added to existing pool where plant or machinery not replaced) does not apply.

(5) “The net abandonment cost” means the amount by which the abandonment expenditure to which the election relates exceeds any amounts received for the remains of the plant or machinery.