Finance Act 2014

PART 1 Transitional provisions

Chargeable periods which straddle start date

1 (1) This paragraph applies in relation to a chargeable period which begins before the start date and ends on or after that date (“the first straddling period”).

For “the start date”, see section 10(3).

(2) The maximum allowance under section 51A of CAA 2001 for the first straddling period is the sum of each maximum allowance that would be found if—

(a) so much (if any) of the first straddling period as falls before 1 January 2013,

(b) so much of the first straddling period as falls on or after that date but before the start date, and

(c) so much of the first straddling period as falls on or after the start date,

were each treated as separate chargeable periods.

(3) But this is subject to paragraphs 2 and 3.

First straddling period beginning before 1 January 2013

2 (1) This paragraph applies where the first straddling period begins before 1 January 2013.

(2) So far as concerns expenditure incurred before 1 January 2013, the maximum allowance under section 51A of CAA 2001 for the first straddling period is what would have been the maximum allowance for that period if neither the amendment made by section 7(1) of FA 2013 nor the amendment made by section 10(1) had been made.

(3) So far as concerns expenditure incurred before the start date, the maximum allowance under section 51A of CAA 2001 for the first straddling period is what would have been the maximum allowance for that period if neither the amendment made by section 10(1) nor the amendments made by Part 2 of this Schedule had been made.

First straddling period beginning on or after 1 January 2013

3 (1) This paragraph applies where no part of the first straddling period falls before 1 January 2013.

(2) So far as concerns expenditure incurred before the start date, the maximum allowance under section 51A of CAA 2001 for the first straddling period is what would have been the maximum allowance for that period if the amendment made by section 10(1) had not been made.

Chargeable periods which straddle 1 January 2016

4 (1) This paragraph applies in relation to a chargeable period (“the second straddling period”) which begins before 1 January 2016 and ends on or after that date.

(2) The maximum allowance under section 51A of CAA 2001 for the second straddling period is the sum of each maximum allowance that would be found if—

(a) the period beginning with the first day of the chargeable period and ending with 31 December 2015, and

(b) the period beginning with 1 January 2016 and ending with the last day of the chargeable period,

were treated as separate chargeable periods.

(3) But, so far as concerns expenditure incurred on or after 1 January 2016, the maximum allowance under section 51A of CAA 2001 for the second straddling period is the maximum allowance, calculated in accordance with sub-paragraph (2), for the period mentioned in paragraph (b) of that sub-paragraph.

Operation of annual investment allowance where restrictions apply

5 (1) Paragraphs 1 to 4 also apply for the purpose of determining the maximum allowance under section 51K of CAA 2001 (operation of annual investment allowance where restrictions apply) in a case where one or more chargeable periods in which the relevant AIA qualifying expenditure is incurred are chargeable periods within paragraph 1(1) or 4(1).

(2) There is to be taken into account for the purpose mentioned in sub-paragraph (1) only chargeable periods of one year or less (whether or not they are chargeable periods within paragraph 1(1) or 4(1)), and, if there is more than one such period, only that period which gives rise to the greatest maximum allowance.

(3) For the purposes of sub-paragraph (2) any chargeable period which—

(a) is longer than a year, and

(b) ends in the tax year 2013-14, 2014-15, 2015-16, 2016-17 or 2017-18,

is to be treated as being a chargeable period of one year ending at the same time as it actually ends.

(4) Nothing in this paragraph affects the operation of sections 51M and 51N of CAA 2001.