Part 2 Plant and machinery allowances

Chapter 4 First-year qualifying expenditure

Types of expenditure which may qualify for first-year allowances

46 General exclusions F1...

(1)

Expenditure within any of the general exclusions in subsection (2) is not first-year qualifying expenditure under F2any of the following provisions—

  • F3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

  • F4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

  • F3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

  • F5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

  • F6 section 45D (expenditure on cars with low CO2 emissions),

  • F7section 45DA (expenditure on zero-emission goods vehicles),

  • F8section 45E (expenditure on plant or machinery for gas refuelling station), F9...

  • F10section 45EA (expenditure on plant or machinery for electric vehicle charging point)

  • F11section 45F (expenditure on plant and machinery for use wholly in a ring fence trade)

    F5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

  • F12section 45K (expenditure on plant and machinery for use in designated assisted areas).

  • F13section 45O (expenditure on plant and machinery for use in F14special tax sites).

  • F15section 45S (expenditure on plant or machinery in other cases)

  • F16section 45U (expenditure on plant or machinery in cases not falling within section 45S etc)

(2)

The general exclusions are—

  • General exclusion 1

    The expenditure is incurred in the chargeable period in which the qualifying activity is permanently discontinued.

  • General exclusion 2

    The expenditure is incurred on the provision of a car (as defined by section F17268A).

  • F18...

  • F19...

  • General exclusion 5

    The expenditure would be long-life asset expenditure but for paragraph 20 of Schedule 3 (transitional provisions).

  • General exclusion 6

    The expenditure is on the provision of plant or machinery for leasing (whether in the course of a trade or otherwise).

    For this purpose, the letting of a ship on charter, or of any other asset on hire, is to be regarded as leasing (whether or not it would otherwise be so regarded).

  • General exclusion 7

    The circumstances of the incurring of the expenditure are that—

    1. (a)

      the provision of the plant or machinery on which the expenditure is incurred is connected with a change in the nature or conduct of a trade or business carried on by a person other than the person incurring the expenditure, and

    2. (b)

      the obtaining of a first-year allowance is the main benefit, or one of the main benefits, which could reasonably be expected to arise from the making of the change.

  • General exclusion 8

    F20Any of the following sections applies—

    • section 13 (use for qualifying activity of plant or machinery provided for other purposes);

    • F21section 13A (use for other purposes of plant or machinery provided for long funding leasing);

    • section 14 (use for qualifying activity of plant or machinery which is a gift).

    This is subject to section 161 (pre-trading expenditure on mineral exploration and access).

F22(3)

Subsection (1) is subject to the following provisions of this section.

(4)

General exclusion 2 does not prevent expenditure being first-year qualifying expenditure under section 45D.

F23(4A)

General exclusion 6 does not prevent expenditure being first-year qualifying expenditure under section 45S if the plant or machinery is provided for leasing under an excluded lease of background plant or machinery for a building.

F24(4B)

General exclusion 6 does not prevent expenditure being first-year qualifying expenditure under section 45U if—

(a)

the plant or machinery is provided for leasing to a lessee for use by the lessee wholly, or almost wholly, for the purpose of earning income which is within the charge to tax, or

(b)

the plant or machinery is provided for leasing to a lessee who is resident in the United Kingdom where the circumstances are such that the plant or machinery is not for use (to a significant extent) by the lessee for the purpose of earning income which is from a source outside the United Kingdom and which is outside the charge to tax.

(4C)

For the purposes of subsection (4B) income is to be regarded as being outside the charge to tax if the income arises to a person who under—

(a)

double taxation arrangements, or

(b)

unilateral relief arrangements,

is afforded or is entitled to claim any relief from the tax chargeable on the income.

(4D)

For this purpose “double taxation arrangements” and “unilateral relief arrangements” have the same meaning as they have in Part 2 of the Taxation (International and Other Provisions) Act 2010 (see sections 2(4) and 8(1) respectively).

(4E)

For the purposes of subsection (4B) it is to be presumed that, unless the contrary is shown, a lessee has made every claim or election for relief from tax, and every claim or election for an exemption from tax, which the lessee is entitled to make.

(4F)

For the purposes of subsection (4B), if there is more than one lessee, references to the lessee are to each of the lessees.

(4G)

For the purposes of subsections (4B) to (4F), any reference to leasing or a lessee includes sub-leasing and a sub-lessee.

F25(5)

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F25(6)

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