Part 2

Plant and machinery allowances
Chapter 11

Overseas leasing

Qualifying purposes

Ships and aircraft
123
1
A ship is used for a qualifying purpose at any time when it is let on charter in the course of a trade which consists of or includes operating ships by a person who is—
a
resident in the United Kingdom or carries on the trade there, and
b
responsible for navigating and managing the ship throughout the period of the charter and for defraying—
i
all expenses in connection with the ship throughout that period, or
ii
substantially all such expenses other than those directly incidental to a particular voyage or to the employment of the ship during that period.
2
Subsection (1) applies, with the necessary modifications, in relation to aircraft as it applies in relation to ships.
3
For the purposes of subsection (1)(b) a person is responsible for something if he—
a
is responsible as principal, or
b
appoints another person to be responsible in his place.
4
Subsections (1) and (2) do not apply if the main object, or one of the main objects—
a
of the letting of the ship or aircraft on charter,
b
of a series of transactions of which the letting of the ship or aircraft on charter was one, or
c
of any of the transactions in such a series,
was to obtain a writing-down allowance determined without regard to section 109 (writing-down allowances at 10%) in respect of expenditure incurred by any person on the provision of the ship or aircraft.