Finance Act 2011

17 After section 62 insert— E+W+S+N.I.

“62A Cases in which disposal value is transition value

(1) Subject as follows, this section applies where an election under section 18A of CTA 2009 has effect in relation to a company and the operation of section 15(2A) brings about a disposal event consisting of plant or machinery beginning to be used for purposes other than those of a qualifying activity.

(2) Where this section applies to a disposal event, the disposal value is the transition value.

(3) The transition value is such amount as gives rise to neither a balancing allowance nor a balancing charge.

(4) This section does not apply if—

(a) the qualifying expenditure in respect of the plant or machinery, or of the group of assets of which it forms part at any time during a relevant accounting period, exceeds £5 million, and

(b) the company has used the plant or machinery otherwise than for the purposes of a permanent establishment in a territory outside the United Kingdom at any time during a relevant preceding accounting period.

(5) For the purposes of subsection (4)(a) plant or machinery used together constitutes a group of assets.

(6) In subsection (4) “relevant preceding accounting period” means the accounting period in which the election under section 18A is made or an earlier accounting period ending less than 6 years before the end of that accounting period.”