Capital Allowances Act 2001

• (4) In relation to the accounting period for which the disposal value is brought into account, TDR (see section 55(1)(b)) for the pool to which the expenditure that was the subject of the allowance was allocated is to be reduced by the amount of the balancing charge.

59B

• (1) This section applies if a first-year allowance has been made to a company in respect of first-year qualifying expenditure under section 45S which is special rate expenditure.

• (2) If the company is required to bring a disposal value into account for an accounting period by reference to the plant or machinery on which the expenditure is incurred, the company is liable to a balancing charge for that period (whether or not it is also liable to any other balancing charge for that period).

• (3) The amount of the balancing charge is the relevant proportion of the disposal value; and the relevant proportion is determined by—

• (a) dividing the amount of the expenditure that was the subject of the allowance by two, and

• (b) dividing the result of that division by the total amount of expenditure that has been the subject of that or any other first-year allowance or has been allocated to a pool for that or any other accounting period.

• (4) In relation to the accounting period for which the disposal value is brought into account, TDR (see section 55(1)(b)) for the pool to which the expenditure that was the subject of the allowance was allocated is to be reduced by the amount of the balancing charge.

59C

• (1) This section applies if arrangements are entered into the main purpose, or one of the main purposes, of which is—

• (a) to secure that a balancing charge under section 59A or 59Bis not chargeable on a company, or

• (b) to secure a reduction in the amount, or a change in the timing, of a balancing charge under section 59A or 59B which is chargeable on a company.

• (2) Sections 59A and 59B are to have effect as if the arrangements had not been entered into.

• (3) In this section “arrangements” include any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable).

Exclusions from allowances under section 45DA

Certification of environmentally beneficial plant and machinery

The different kinds of pools

Amount of allowances and charges

Disposal of assets where first-year allowance made under section 45S for expenditure which is special rate expenditure

Leased assets: arrangements reducing disposal value of asset

SME company leaving NI corporation tax regime

SME partnership leaving NI corporation tax regime

Disposal value on cessation of notional ownership

Expenditure related to reuse etc. qualifies for writing-down allowances

Meaning of “general decommissioning expenditure”

General decommissioning expenditure incurred before cessation of ring fence trade

Decommissioning services supplied by connected person

Purchaser of land discharging obligations of equipment lessee

Incoming lessee where lessor not entitled to allowances

Fixture on which an industrial buildings allowance has been made

Election to apportion sale price on sale of qualifying interest

Plant or machinery subject to further operating lease

Determining the net present value of the rentals for purposes of s.228K

Meaning of “husbandry”

Ceasing to work mineral deposits

Avoidance affecting proceeds of balancing event

Section 48 (films: relief for production or acquisition expenditure)

Section 117 (company tax returns, assessments and related matters)

Section 105 (corporation tax: use of currencies other than sterling)

45U

Expenditure is first-year qualifying expenditure if—

• (a) it is incurred on or after 1 January 2026,

• (b) it is not special rate expenditure,

• (c) it is expenditure on plant or machinery which is unused and not second-hand, and

• (d) it is not excluded by section 45V (exclusion of expenditure under disqualifying arrangements) or 46 (general exclusions).

45V

• (1) Expenditure is not first-year qualifying expenditure under section 45U if the expenditure is incurred directly or indirectly in consequence of, or otherwise in connection with, disqualifying arrangements.

• (2) Arrangements are “disqualifying arrangements” for the purposes of this section if—

• (a) the main purpose, or one of the main purposes, of the arrangements is to secure a tax advantage connected with expenditure being first-year qualifying expenditure under section 45U, and

• (b) it is reasonable, taking account of all the relevant circumstances—

• (i) to conclude that the arrangements are, or include steps that are, contrived, abnormal or lacking a genuine commercial purpose, or

• (ii) to regard the arrangements as circumventing the intended limits of relief under this Act or otherwise exploiting shortcomings in this Act.

• (3) In this section “arrangements” include any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable).