Capital Allowances Act 2001

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Capital Allowances Act 2001

2001 Chapter 2

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Capital Allowances Act 2001

2001 Chapter 2

CONTENTS
PART 1
INTRODUCTION
CHAPTER 1
CAPITAL ALLOWANCES: GENERAL
Section
1	Capital allowances
2	General means of giving effect to capital allowances
3	Claims for capital allowances
4	Capital expenditure
5	When capital expenditure is incurred
6	Meaning of "chargeable period"
CHAPTER 2
EXCLUSION OF DOUBLE RELIEF
7	No double allowances
8	No double relief through pooling under Part 2 (plant and machinery allowances)
9	Interaction between fixtures claims and other claims
10	Interpretation
PART 2
PLANT AND MACHINERY ALLOWANCES
CHAPTER 1
INTRODUCTION
11	General conditions as to availability of plant and machinery allowances
12	Expenditure incurred before qualifying activity carried on
13	Use for qualifying activity of plant or machinery provided for other purposes
14	Use for qualifying activity of plant or machinery which is a gift
CHAPTER 2
QUALIFYING ACTIVITIES
15	Qualifying activities
16	Ordinary Schedule A businesses
17	Furnished holiday lettings businesses
18	Management of investment companies
19	Special leasing of plant or machinery
20	Employments and offices
CHAPTER 3
QUALIFYING EXPENDITURE
Buildings, structures and land
21	Buildings
22	Structures, assets and works
23	Expenditure unaffected by sections 21 and 22
24	Interests in land
25	Building alterations connected with installation of plant or machinery
Demolition costs
26	Demolition costs
Expenditure on thermal insulation, safety measures, etc.
27	Application of Part to thermal insulation, safety measures, etc.
28	Thermal insulation of industrial buildings
29	Fire safety
30	Safety at designated sports grounds
31	Safety at regulated stands at sports grounds
32	Safety at other sports grounds
33	Personal security
Exclusion of certain types of expenditure
34	Expenditure by MPs and others on accommodation
35	Expenditure on plant or machinery for use in dwelling-house not qualifying expenditure in certain cases
36	Restriction on qualifying expenditure in case of employment or office
37	Exclusion where sums payable in respect of depreciation
38	Production animals etc.
CHAPTER 4
FIRST-YEAR QUALIFYING EXPENDITURE
General
39	First-year allowances available for certain types of qualifying expenditure only
Types of expenditure which may qualify for first-year allowances
40	Expenditure incurred for Northern Ireland purposes by small or medium-sized enterprises
41	Miscellaneous exclusions from section 40 (expenditure for Northern Ireland purposes etc.)
42	Exclusion of plant or machinery partly for use outside Northern Ireland
43	Effect of plant or machinery subsequently being primarily for use outside Northern Ireland
44	Expenditure incurred by small or medium-sized enterprises
45	ICT expenditure incurred by small enterprises
46	General exclusions applying to sections 40, 44 and 45
Expenditure of small or medium-sized enterprises
47	Expenditure of small or medium-sized enterprises: companies
48	Expenditure of small or medium-sized enterprises: businesses
49	Whether company is a member of a large or medium-sized group
Supplementary
50	Time when expenditure is incurred
51	Disclosure of information between UK tax authorities
CHAPTER 5
ALLOWANCES AND CHARGES
First-year allowances
52	First-year allowances
Pooling
53	Pooling of qualifying expenditure
54	The different kinds of pools
Writing-down and balancing allowances and balancing charges
55	Determination of entitlement or liability
56	Amount of allowances and charges
Available qualifying expenditure
57	Available qualifying expenditure
58	Initial allocation of qualifying expenditure to pools
59	Unrelieved qualifying expenditure
Disposal events and disposal values: general
60	Meaning of "disposal receipt" and "disposal event"
61	Disposal events and disposal values
62	General limit on amount of disposal value
63	Cases in which disposal value is nil
64	Case in which no disposal value need be brought into account
The final chargeable period
65	The final chargeable period
List of provisions outside this Chapter about disposal values
66	List of provisions outside this Chapter about disposal values
CHAPTER 6
HIRE-PURCHASE ETC. AND PLANT OR MACHINERY PROVIDED BY LESSEE
Hire-purchase and similar contracts
67	Plant or machinery treated as owned by person entitled to benefit of contract, etc.
68	Disposal value on cessation of notional ownership
69	Hire-purchase etc. and fixtures
Plant or machinery provided by lessee
70	Plant or machinery provided by lessee
CHAPTER 7
COMPUTER SOFTWARE
71	Software and rights to software
72	Disposal values
73	Limit on disposal values
CHAPTER 8
CARS, ETC.
Cars above the cost threshold
74	Single asset pool
75	General limit on amount of writing-down allowance
76	Limit where part of expenditure met by another person
77	Car used partly for purposes other than those of qualifying activity
78	Effect of partial depreciation subsidy
79	Cases where Chapter 17 (anti-avoidance) applies
Vehicles provided for purposes of employment or office
80	Vehicles provided for purposes of employment or office
Interpretation
81	Extended meaning of "car"
82	Qualifying hire cars
CHAPTER 9
SHORT-LIFE ASSETS
83	Meaning of "short-life asset"
84	Cases in which short-life asset treatment is ruled out
85	Election for short-life asset treatment: procedure
86	Short-life asset pool
87	Short-life assets provided for leasing
88	Sales at under-value
89	Disposal to connected person
CHAPTER 10
LONG-LIFE ASSETS
Long-life asset expenditure
90	Long-life asset expenditure
91	Meaning of "long-life asset"
92	Application of Chapter to part of expenditure
Expenditure excluded from being long-life asset expenditure
93	Fixtures etc.
94	Ships
95	Railway assets
96	Cars
97	Expenditure within the relevant monetary limit: general
98	Expenditure to which the monetary limits apply
99	The monetary limit
100	Exceeding the monetary limit
Rules applying to long-life asset expenditure
101	Long-life asset pool
102	Writing-down allowances at 6%
Anti-avoidance provisions
103	Later claims
104	Disposal value of long-life assets
CHAPTER 11
OVERSEAS LEASING
Basic terms
105	"Leasing", "overseas leasing" etc.
106	The designated period
Certain expenditure to be pooled
107	The overseas leasing pool
108	Effect of disposal to connected person on overseas leasing pool
Allowances reduced or, in certain cases, prohibited
109	Writing-down allowances at 10%
110	Cases where allowances are prohibited
Recovery of excess allowances
111	Excess allowances: standard recovery mechanism
112	Excess allowances: connected persons
113	Excess allowances: special provision for ships
Recovery of allowances given in cases where prohibition applies
114	Prohibited allowances: standard recovery mechanism
115	Prohibited allowances: connected persons
Application of Chapter in relation to joint lessees
116	Mitigation of regime
117	Recovery of allowances in case of joint lessees
Duties to supply information
118	Certificate relating to protected leasing
119	Notice of change of use of plant or machinery
120	Notice and joint lessees
Qualifying purposes
121	Meaning of "short-term leasing"
122	Short-term leasing by buyer, lessee, etc.
123	Ships and aircraft
124	Transport containers
125	Other qualifying purposes
Minor definitions
126	Minor definitions
CHAPTER 12
SHIPS
Pooling and postponement of allowances
127	Single ship pool
128	Expenditure which is not to be allocated to single ship pool
129	Election to use the appropriate non-ship pool
130	Notice postponing first-year or writing-down allowance
131	Effect of postponement
132	Disposal events and single ship pool
133	Ship not used
Deferment of balancing charges
134	Deferment of balancing charges: introduction
135	Claim for deferment
136	Further conditions for deferment
137	Effect of deferment
138	Limit on amount deferred
139	Amount taken into account in respect of old ship
Attribution of deferred amounts
140	Notice attributing deferred amounts to new expenditure
141	Deferred amounts attributed to earlier expenditure first
142	Variation of attribution
143	Effect of attribution
144	Amounts which cease to be attributable
145	Requirement to notify where no entitlement to defer amounts
Expenditure on new shipping
146	Basic meaning of expenditure on new shipping
147	Exclusions: ship previously owned
148	Exclusions: object to secure deferment
149	Exclusions: later events
150	Exclusions where expenditure not incurred by shipowner
Qualifying ships
151	Basic meaning of qualifying ship
152	Ships under 100 tons
153	Ships which are not qualifying ships
154	Further registration requirement
Deferment of balancing charges: supplementary provisions
155	Change in the persons carrying on the qualifying activity
156	Connected persons
Further provisions
157	Adjustment of assessments etc.
158	Members of same group
CHAPTER 13
PROVISIONS AFFECTING MINING AND OIL INDUSTRIES
Expenditure connected with mineral extraction trades
159	Meaning of "mineral extraction trade" etc.
160	Expenditure treated as incurred for purposes of mineral extraction trade
161	Pre-trading expenditure on mineral exploration and access
Provisions relating to ring fence trades
162	Ring fence trade a separate qualifying activity
163	Meaning of "abandonment expenditure"
164	Abandonment expenditure incurred before cessation of ring fence trade
165	Abandonment expenditure within 3 years of ceasing ring fence trade
Transfers of interests in oil fields: anti-avoidance
166	Transfers of interests in oil fields: anti-avoidance
Oil production sharing contracts
167	Oil production sharing contracts
168	Expenditure on plant or machinery incurred by contractor
169	Expenditure on plant or machinery incurred by participator
170	Participator's expenditure attributable to plant or machinery
171	Disposal values on cessation of ownership
CHAPTER 14
FIXTURES
Introduction
172	Scope of Chapter etc.
173	Meaning of "fixture" and "relevant land"
174	Meaning of "equipment lease" and "lease"
175	Meaning of "interest in land", etc.
Persons who are treated as owners of fixtures
176	Person with interest in relevant land having fixture for purposes of qualifying activity
177	Equipment lessors
178	Equipment lessee has qualifying activity etc.
179	Equipment lessor has right to sever fixture that is not part of building
180	Equipment lease is part of affordable warmth programme
181	Purchaser of land giving consideration for fixture
182	Purchaser of

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