SCHEDULES

SCHEDULE 1Minor and consequential amendments

Part 2Other enactments

Capital Allowances Act 2001 (c. 2)

486

1

Amend section 112 (excess allowances: connected persons) as follows.

2

In subsection (1) for paragraph (b) and the “and” immediately after that paragraph substitute—

b

the transaction was not effected (or, if more than one, none of the transactions was effected) on the occasion of a change in the persons carrying on the qualifying activity—

i

which falls within section 343(1) of ICTA (company reconstructions without change of ownership), or

ii

in relation to which Condition A or Condition B is met, and

3

After subsection (1) insert—

1A

Condition A is that—

a

at least one person who carried on the qualifying activity immediately before or immediately after the change was within the charge to income tax in respect of that activity, and

b

at least one person who carried on the qualifying activity before the change continued to carry it on after the change.

1B

Condition B is that—

a

the qualifying activity was carried on in partnership both immediately before and immediately after the change,

b

a company that was within the charge to corporation tax in respect of the activity carried it on immediately before or immediately after the change, and

c

at least one company which carried the activity on before the change continued to carry it on after the change.