Part 2

Plant and machinery allowances
Chapter 11

Overseas leasing

Recovery of allowances given in cases where prohibition applies

Prohibited allowances: connected persons
115
1
Section 114 applies with the modifications in subsection (2) in a case in which—
a
an amount falls to be treated as a balancing charge under that section,
b
the person on whom the balancing charge is to be imposed acquired the plant or machinery in question as a result of a transaction between connected persons (or a series of transactions each of which was between connected persons),
c
none of the relevant provisions of ICTA under which the qualifying activity might have been treated as continuing has applied in respect of the transaction (or transactions), and
d
a first-year allowance, a writing-down allowance or a balancing allowance in respect of expenditure on the provision of that plant or machinery has been made to any of those persons.
2
For the purpose of calculating the balancing charge—
a
A is the amount of any allowances within subsection (1)(d),
b
any consideration paid or received on a disposal of the plant or machinery between the connected persons is to be disregarded, and
c
if a balancing allowance or a balancing charge has been made in respect of any of the transactions, A is to be adjusted in a just and reasonable manner.
3
“The relevant provisions of ICTA” means section 113(2), 114(1) or 343(2) (effect of change in persons carrying on a trade etc. or of company reconstruction).