3(1)Section 218 is amended as follows.U.K.
(2)In subsection (1), for “(2) and” substitute “ (2), (2A) and ”.
(3)After subsection (2) insert—
“(2A)D is nil if—
(a)S is not required to bring a disposal value into account under this Part because of the relevant transaction, and
(b)at any time before that transaction S or a linked person became owner of the plant or machinery without incurring either capital expenditure or qualifying revenue expenditure on its provision.”
(4)In subsection (3), for the words from the beginning to “transaction,” substitute “ Otherwise, ”.
(5)After that subsection insert—
“(3A)Linked person”, in relation to plant or machinery, means a person—
(a)who owned the plant or machinery at any time before the relevant transaction, and
(b)who was connected with S at any time between—
(i)the time when the person became owner of the plant or machinery, and
(ii)the time of the relevant transaction.
(3B)Expenditure on the provision of plant or machinery is “qualifying revenue expenditure” if it is expenditure of a revenue nature—
(a)that is at least equal to the amount of expenditure that would reasonably be expected to have been incurred on the provision of the plant or machinery in a transaction between persons dealing with each other at arm's length in the open market, or
(b)that is incurred by the manufacturer of the plant or machinery and is at least equal to the amount that it would have been reasonable to expect to have been the normal cost of manufacturing the plant or machinery.”
(6)The amendments made by this paragraph have effect in relation to expenditure of B's that is incurred on or after 26 February 2015.