Part 2 Plant and machinery allowances
Chapter 4 First-year qualifying expenditure
Types of expenditure which may qualify for first-year allowances
F145TExclusion of expenditure incurred under disqualifying arrangements
(1)
Expenditure is not first-year qualifying expenditure under section 45S if the expenditure is incurred directly or indirectly in consequence of, or otherwise in connection with, disqualifying arrangements.
(2)
Arrangements are “disqualifying arrangements” for the purposes of this section if—
(a)
the main purpose, or one of the main purposes, of the arrangements is to secure a tax advantage connected with expenditure being first-year qualifying expenditure under section 45S (including securing the advantage by avoiding a balancing charge under section 59A or 59B or reducing the amount or timing of such a charge), and
(b)
it is reasonable, taking account of all the relevant circumstances—
(i)
to conclude that the arrangements are, or include steps that are, contrived, abnormal or lacking a genuine commercial purpose, or
(ii)
to regard the arrangements as circumventing the intended limits of relief under this Act or otherwise exploiting shortcomings in this Act.
(3)
In this section “arrangements” include any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable).