Part 2

Plant and machinery allowances
Chapter 5

Allowances and charges

Available qualifying expenditure

Initial allocation of qualifying expenditure to pools
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1
The following rules apply to the allocation of a person’s qualifying expenditure to the appropriate pool.
2
An amount of qualifying expenditure is not to be allocated to a pool for a chargeable period if that amount has been taken into account in determining the person’s available qualifying expenditure for an earlier chargeable period.
3
Qualifying expenditure is not to be allocated to a pool for a chargeable period before that in which the expenditure is incurred.
4
Qualifying expenditure is not to be allocated to a pool for a chargeable period unless the person owns the plant or machinery at some time in that period.
5
If a first-year allowance is made in respect of an amount of first-year qualifying expenditure—
a
subject to subsection (6), none of that amount is to be allocated to a pool for the chargeable period in which the expenditure is incurred, and
b
the amount that may be allocated to a pool for any chargeable period is limited to the balance left after deducting the first-year allowance.
6
If—
a
a first-year allowance is made in respect of an amount of first-year qualifying expenditure,
b
a disposal event occurs in respect of the plant or machinery in any chargeable period, and
c
none of the balance left after deducting the first-year allowance has been allocated to a pool for an earlier chargeable period,
the balance (or some of it) must be allocated to a pool for the chargeable period in which the disposal event occurs.
7
Subsection (6) applies even if the balance is nil (because of a 100% first-year allowance).
8
“The appropriate pool” means whichever pool is applicable under the provisions of this Part apart from this section.