Legalize / United Kingdom / Public General Act

Capital Allowances Act 2001

Type Public General Act

Publication 2001-03-22

Last updated 2026-03-18

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

(3) A “material disposal” of an oil licence means any disposal (including a part disposal and a disposal of an interest in an oil licence) other than a disposal in relation to which section 568 or 569 (sales treated as being for alternative amount) has effect.

(4) If—

(a) the material disposal is part of a larger transaction under which one party makes to another material disposals of two or more licences, and

(b) at the time of disposal, each of those licences relates to an undeveloped area,

the licensed area for the purposes of subsection (1)(b) is the totality of the licensed areas in relation to those licences.

(5) In relation to a material disposal of a licence under which the buyer acquires an interest in the licence only so far as it relates to part of the licensed area, any reference in this section and section 554 to the licensed area is to be read as a reference only to that part of the licensed area to which the buyer’s acquisition relates.

(6) In subsection (1)(b)—

“exploration work”, in relation to an area, means work carried out for the purpose of searching for oil anywhere in that area, and

“appraisal work”, in relation to an area, means work carried out for the purpose of ascertaining—the extent or characteristics of any oil-bearing area the whole or part of which lies in that area, orwhat the reserves of oil of any such oil-bearing area are.

Circumstances in which oil licence relates to undeveloped area

554

(1) A UK oil licence relates to an undeveloped area if—

(a) no consent for development has been granted to the licensee for any part of the licensed area by the relevant authority, and

(b) no programme of development has been served on the licensee or approved for any part of the licensed area by the relevant authority.

(2) A foreign oil concession relates to an undeveloped area if—

(a) no development has actually taken place in any part of the licensed area, and

(b) no condition for the carrying out of development anywhere in that area has been satisfied—

(i) by the grant of any consent by the authorities of a country or territory exercising jurisdiction in relation to the area, or

(ii) by the approval or service on the licensee, by any such authorities, of any programme of development.

(3) Subsections (4) and (5) of section 36 of FA 1983 (meaning of development) apply for the purposes of subsections (1) and (2).

(4) In subsection (1) “licensee” means—

(a) the person entitled to the benefit of the licence or, if two or more persons are entitled to the benefit, each of those persons, and

(b) a person who has rights under an agreement which is—

(i) approved by the Commissioners for Her Majesty’s Revenue and Customs, and

(ii) certified by the relevant authority to confer on that person rights which are the same as, or similar to, those conferred by a licence.

(5) In subsection (2) “licensee” means the person with the concession or any person having an interest in it.

Disposal of oil licence with exploitation value

555

(1) This section applies if—

(a) a person (“the seller”) disposes of an interest in an oil licence to another (“the buyer”), and

(b) part of the value of the interest is attributable to allowable exploration expenditure incurred by the seller.

(2) For the purposes of Part 6 (research and development allowances) the disposal is to be treated as a disposal by which the seller ceases to own an asset representing the allowable exploration expenditure to which that part of the value of the interest is attributable.

(3) Part 6 applies as if the disposal value to be brought into account were equal to so much of the buyer’s expenditure on acquiring the interest as it is just and reasonable to attribute to that part of the value of the interest.

(4) In this section “allowable exploration expenditure” means expenditure which—

(a) is incurred on mineral exploration and access within the meaning of Part 5 (mineral extraction allowances), and

(b) is qualifying expenditure for the purposes of Part 6.

Minor definitions

556

(1) In this Chapter “licensed area” means (subject to section 553(4) and (5))—

(a) in relation to a UK oil licence, the area to which the licence applies, and

(b) in relation to a foreign oil concession, the area in relation to which the right to search for or win oil is conferred or exercisable under the concession.

(2) In this Chapter “the relevant authority”, in relation to a UK oil licence means—

(a) in the case of a licence under Part I of the 1998 Act—

(ai) the Scottish Ministers, in relation to the Scottish onshore area, as defined in section 8A of that Act;

(i) the Welsh Ministers, in relation to the Welsh onshore area (as defined in section 8A of that Act);

(ii) otherwise the Oil and Gas Authority, and, and

(b) in the case of a licence under the 1964 Act, the Department of Enterprise, Trade and Investment in Northern Ireland.

(3) In this Chapter “oil”—

(a) in relation to a UK oil licence, means any substance won or capable of being won under the authority of a licence granted under Part I of the 1998 Act or the 1964 Act, other than methane gas won in the course of operations for making and keeping mines safe, and

(b) in relation to a foreign oil concession, means any petroleum (as defined by section 1 of the 1998 Act).

Chapter 4 — Partnerships, successions and transfers

Application of sections 558 and 559

557

Sections 558 (effect of partnership changes) and 559 (effect of successions) apply for the purposes of this Act other than—

(a) Part 2 (plant and machinery allowances),

(b) Part 6 (research and development allowances), and

Effect of partnership changes

558

(1) This section applies if—

(a) a relevant activity has been set up and is at any time carried on in partnership,

(b) there has been a change in the persons engaged in carrying on the relevant activity, and

(1A) For income tax purposes, the condition is that a person carrying on the relevant activity immediately before the change continues to carry it on after the change.

(1B) For corporation tax purposes, the condition is that a company carrying on the relevant activity in partnership immediately before the change continues to carry it on in partnership after the change.

(2) In this section—

“ the present partners ” means the person or persons for the time being carrying on the relevant activity, and

“ predecessors ”, in relation to the present partners, means their predecessors in carrying on the relevant activity.

(3) Any allowance or charge is to be made to or on the present partners.

(4) The amount of any allowance or charge arising under subsection (3) is to be calculated as if—

(a) the present partners had at all times been carrying on the relevant activity, and

(b) everything done to or by their predecessors in carrying on the relevant activity had been done to or by the present partners.

(5) In this section “ relevant activity ” means a trade, property business, profession or vocation.

Effect of successions

559

(1) This section applies if—

(a) a person (“the successor”) succeeds to a relevant activity which until that time was carried on by another person (“the predecessor”), and

(b) the condition in subsection (1A) or (1B) (whichever is appropriate) is met.

(1A) For income tax purposes, the condition is that no person carrying on the relevant activity immediately before the succession continues to carry it on after the succession.

(1B) For corporation tax purposes, the condition is that no company carrying on the relevant activity in partnership immediately before the succession continues to carry it on in partnership after the succession.

(2) The property in question is to be treated as if—

(a) it had been sold to the successor when the succession takes place, and

(b) the net proceeds of the sale were the market value of the property.

(3) The property in question is any property which—

(a) immediately before the succession, was in use for the purposes of the discontinued relevant activity, and

(b) immediately after the succession, and without being sold, is in use for the purposes of the new relevant activity.

(4) No entitlement to an initial allowance arises under this section.

(5) In this section “relevant activity” means a trade, property business, profession or vocation.

Transfer of insurance company business

560

(1) This section applies if—

(a) assets are transferred as part of, or in connection with, the transfer of the whole or part of the business of an insurance company to another company,

(b) the transfer is—

(i) in accordance with an insurance business transfer scheme to transfer business which consists of the effecting or carrying out of contracts of long-term insurance, or

(ii) a qualifying overseas transfer ....

(2) But this section does not apply in relation to any asset transferred to a non-resident company unless the asset will fall to be treated, immediately after the transfer, as an asset which is held for the purposes of the whole or a part of so much of any business carried on by the non-resident company as is carried on through a permanent establishment in the United Kingdom.

(3) This section also does not apply if section 561 applies (transfer or division of UK business).

(4) If this section applies—

(a) any allowances and charges that would have been made to or on the transferor are to be made instead to or on the transferee, and

(b) the amount of any such allowance or charge is to be calculated as if everything done to or by the transferor had been done to or by the transferee,

but no sale or transfer of assets made to the transferee by the transferor is to be treated as giving rise to any such allowance or charge.

(5) In this section—

(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(d) “non-resident company” means a company resident outside the United Kingdom.

(e) qualifying overseas transfer” means so much of a transfer of the whole or any part of the business of an overseas life insurance company carried on through a permanent establishment in the United Kingdom as takes place in accordance with an authorisation granted outside the United Kingdom for the purposes of Article 39 of Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) ).

Transfer of a UK trade to a company in another member State

561

(1) This section applies if and in so far as—

(a) a qualifying company resident in one relevant state (“the transferor”) transfers the whole or part of a business carried on by it in the United Kingdom to one or more qualifying companies resident in one or more other relevant states (“the transferee” or “the transferees”),

(b) section 140A of TCGA 1992 (transfer of assets treated as no-gain no-loss disposal) applies in relation to the transfer, and

(i) is resident in the United Kingdom, or

(ii) carries on in the United Kingdom through a permanent establishment a business which consists of, or includes, the business or part of the business transferred.

(2) If this section applies—

(a) the transfer itself does not give rise to any allowances or charges under this Act, and

(b) in relation to assets included in the transfer, anything done to or by the transferor before the transfer is to be treated after the transfer as having been done to or by the transferee (or each transferee).

(3) If, for the purposes of subsection (2)(b), expenditure falls to be apportioned between assets included in the transfer and other assets, the apportionment is to be made in a just and reasonable manner.

(4) In this section “ qualifying company ” means a body incorporated under the law of a relevant state.

(4A) In this section “relevant state” means the United Kingdom or a member State.

(5) If this section applies, section 948 of CTA 2010 (modified application of CAA 2001 in relation to trade transfers without a change of ownership) does not apply.

Chapter 5 — Miscellaneous

Apportionment

Apportionment where property sold together

562

(1) Any reference in this Act to the sale of property includes the sale of that property together with any other property.

(2) For the purposes of subsection (1), all property sold as a result of one bargain is to be treated as sold together even though—

(a) separate prices are, or purport to be, agreed for separate items of that property, or

(b) there are, or purport to be, separate sales of separate items of that property.

(3) If an item of property is sold together with other property, then, for the purposes of this Act—

(a) the net proceeds of the sale of that item are to be treated as being so much of the net proceeds of sale of all the property as, on a just and reasonable apportionment, is attributable to that item, and

(b) the expenditure incurred on the provision or purchase of that item is to be treated as being so much of the consideration given for all the property as, on a just and reasonable apportionment, is attributable to that item.

(4) This section applies, with the necessary modifications, to other proceeds (consisting of insurance money or other compensation) as it applies in relation to the net proceeds of a sale.

(5) This section applies in relation to Part 5 as if expenditure on the provision or purchase of an item of property included expenditure on the acquisition of—

(a) a mineral asset (as defined by section 397), or

(b) land outside the United Kingdom.

Procedure for determining certain questions

Procedure for determining certain questions affecting two or more persons

563

(1) This section applies in relation to the determination of a question if—

(a) at the time when the question falls to be determined, it appears that the determination is material to the liability to tax (for whatever period) of one or more persons, and

(b) section 564 provides for this section to apply.

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) An application for the tribunal to determine the question is to be subject to the relevant provisions of Part 5 of the Taxes Management Act 1970 (see, in particular, section 48(2)(b) of that Act), and each of the persons concerned is entitled to be a party to the proceedings on the application.

Questions to which procedure in section 563 applies

564

(1) Section 563 applies in relation to the determination for the purposes of any of Parts 3A to 11 or this Part of any question about the way in which a sum is to be apportioned.

(2) Section 563 applies in relation to any determination of the market value of property for the purposes of—

(a) any provision of Part 2 (plant and machinery allowances),

(b) section 423 (mineral extraction allowances: amount of disposal value to be brought into account),

(d) section 568 or 569 (sales treated as being for alternative amount), or

(e) section 573 (transfers treated as sales).

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) If section 561 (transfer or division of UK business) applies, section 563 applies—

(a) for the purposes of the tax of both company A and company B referred to in that section, and

(b) in relation to the determination of any question of apportionment of expenditure under section 561(3).

Tax agreements for income tax purposes

565

(1) This section applies if—

(a) a person is entitled to an allowance for income tax purposes,

(b) that person enters into a tax agreement with an officer of Revenue and Customs for the tax year in which the allowance would be given effect, and

(2) In this section “ tax agreement ” means an agreement in writing as to the extent to which the allowance in question is to be given effect for the tax year in question.

(3) If this section applies, the allowance is to be treated as if it had been given effect under an assessment—

(a) for the tax year for which the tax agreement is made, and

(b) to the extent set out in the tax agreement.

(4) A tax agreement may relate to any method by which allowances are given effect under this Act.

Companies not resident in the United Kingdom

566

(1) This section applies if a company not resident in the United Kingdom is—

(a) within the charge to corporation tax in respect of one source of income, and

(b) within the charge to income tax in respect of another source.

(2) Allowances related to any source of income are to be given effect against income chargeable to the same tax as is chargeable on income from that source.

Sales treated as being for alternative amount

Sales treated as being for alternative amount: introductory

567

(1) Sections 568 to 570 apply for the purposes of Parts ... 3A, ... ... 5, 6 and 10.

(2) For the purposes of sections 568 to 570, the control test is met if—

(a) the buyer is a body of persons over whom the seller has control,

(b) the seller is a body of persons over whom the buyer has control,

(d) the seller and the buyer are connected persons.

(3) In subsection (2) “ body of persons ” includes a partnership.

(4) For the purposes of sections 568 to 570, the tax advantage test is met if it appears that the sole or main benefit which might be expected to accrue from—

(a) the sale, or

(b) transactions of which the sale is one,

is the obtaining of a tax advantage by all or any of the parties under any provision of this Act except Part 2.

(5) Sections 568 to 570 do not apply if section 561 applies (transfer or division of UK business).

Sales treated as being at market value

568

(1) A sale of property that is not at market value is treated as being at market value if—

(a) the control test is met, or

(b) the tax advantage test is met.

(2) This section is subject to any election under section 569.

Election to treat sale as being for alternative amount

569

(1) The parties to a sale of property that is not for the alternative amount may elect for the sale to be treated as being for the alternative amount if—

(a) the control test is met or section 573 applies (transfers treated as sales), and

(b) the tax advantage test is not met.

(2) Subsection (1) is subject to section 570.

(3) The alternative amount is the lower of market value and—

(a) if the sale is relevant for the purposes of Part ...10, the residue of the qualifying expenditure immediately before the sale;

(b) if the sale is relevant for the purposes of Part 5, the unrelieved qualifying expenditure immediately before the sale;

(i) in a case where an allowance under Part 6 is given for the expenditure represented by the asset sold, nil;

(ii) in any other case, the qualifying expenditure represented by the asset sold.

(4) In subsection (3) “ residue of qualifying expenditure ”, “ unrelieved qualifying expenditure ” and “ qualifying expenditure ” have the same meaning as in the Part for the purposes of which the sale is relevant.

(5) If the sale—

(a) is relevant for the purposes of Part ...10, and

(b) is treated as being for the residue of the qualifying expenditure immediately before the sale,

no balancing adjustment is to be made as a result of the sale under section ...517 (building not a qualifying dwelling-house throughout).

(6) If, after the date of the sale, an event occurs as a result of which a balancing charge would have fallen to be made on the seller if—

(a) he had continued to own the property, and

(b) he had done all such things, and been allowed all such allowances, as were done by or allowed to the buyer,

the balancing charge is to be made on the buyer.

(7) All such assessments and adjustments of assessments are to be made as are necessary to give effect to the election.

(8) For the purposes of this section and section 570, a sale is relevant for the purposes of a Part if it is of property of a kind that is relevant for deciding whether an allowance or charge is made under that Part.

Elections: supplementary

570

(1) Section 569(1) does not apply to a sale that is relevant for the purposes of 3A... ....

(2) No election under section 569 may be made if—

(a) the circumstances of the sale or the parties to it mean that a relevant allowance or charge will not be capable of falling to be made, or

(b) the buyer is a dual resident investing company.

(3) In subsection (2)(a) “ relevant allowance or charge ” means an allowance or charge under Part ... 5, 6, 9 or 10 which (ignoring the circumstances mentioned in subsection (2)(a)) would or might fall to be made, as a result of the sale, to or on any of the parties to it.

(4) If the sale is relevant for the purposes of Part 10, no election under section 569 may be made unless, at the time of the sale or any earlier time, both the seller and the buyer are or have been approved bodies (as defined in section 492).

(5) An election under section 569 must be made by notice to an officer of Revenue and Customs not later than 2 years after the sale.

Chapter 6 — Final provisions

General interpretation

Application of Act to parts of assets

571

(1) In this Act references to an asset of any kind (including a building or structure, plant or machinery or works) include a part of an asset.

(2) But subsection (1) does not apply if the context otherwise requires.

References to sale of property and time of sale

572

(1) In this Act references to the sale of property include—

(a) the exchange of property, and

(b) the surrender for valuable consideration of a leasehold interest (or, in Scotland, the interest of the tenant in property subject to a lease).

(2) For the purposes of subsection (1), any provision of this Act referring to a sale has effect with the necessary modifications, including, in particular, those in subsection (3).

(3) The modifications are that—

(a) references to the net proceeds of sale and to the price include the consideration for the exchange or surrender, and

(b) references to capital sums included in the net proceeds of sale or paid on a sale include so much of the consideration for the exchange or surrender as would have been a capital sum if it had been a money payment.

(4) Any reference in this Act (except in Part 6) to the time of any sale is to be read as a reference to whichever is the earlier of—

(a) the time of completion, and

(b) the time when possession is given.

Transfers treated as sales

573

(1) This section applies for the purposes of Parts 2A, ... 3A... ... and 10 and other provisions of this Act relevant to those Parts if—

(a) there is a transfer of the interest which is the relevant interest for the purposes of the Part in question, and

(b) the transfer is not a sale.

(2) The transfer is treated as a sale of the relevant interest.

(3) The sale is treated as being at market value, subject to any election under section 569 (election to treat sale as being for alternative amount).

(4) This section does not apply if section 561 applies (transfer or division of UK business).

Meaning of “control”

574

(1) In this Act “ control ” is used in the sense given in this section (but, for the purposes of section 575, this definition applies only where expressly indicated).

(2) In relation to a body corporate (“ company A ”), “ control ” means the power of a person (“ P ”) to secure—

(a) by means of the holding of shares or the possession of voting power in relation to that or any other body corporate, or

(b) as a result of any powers conferred by the articles of association or other document regulating that or any other body corporate,

that the affairs of company A are conducted in accordance with P’s wishes.

(3) In relation to a partnership, “ control ” means the right to a share of more than half of the assets, or of more than one half of the income, of the partnership.

Connected persons

575

(1) For the purposes of this Act whether a person is connected with another is determined in accordance with this section unless otherwise indicated.

(2) An individual (“A”) is connected with another individual (“B”) if—

(a) A is B's spouse or civil partner,

(b) A is a relative of B,

(d) A is a relative of B's spouse or civil partner, or

(e) A is the spouse or civil partner of a relative of B's spouse or civil partner.

(3) A person, in the capacity as trustee of a settlement, is connected with—

(a) any individual who is a settlor in relation to the settlement,

(b) any person connected with such an individual,

(d) any non-UK resident company which, if it were UK resident, would be a close company whose participators include the trustees of the settlement,

(e) any body corporate controlled (within the meaning of section 574) by a company within paragraph or ,

(f) if the settlement is the principal settlement in relation to one or more sub-fund settlements, a person in the capacity as trustee of such a sub-fund settlement, and

(g) if the settlement is a sub-fund settlement in relation to a principal settlement, a person in the capacity as trustee of any other sub-fund settlements in relation to the principal settlement.

(4) A person who is a partner in a partnership is connected with—

(a) any partner in the partnership,

(b) the spouse or civil partner of any individual who is a partner in the partnership, and

But this subsection does not apply in relation to acquisitions or disposals of assets of the partnership pursuant to genuine commercial arrangements.

(5) A company is connected with another company if—

(a) the same person has control of both companies,

(b) a person (“A”) has control of one company and persons connected with A have control of the other company,

(d) a group of two or more persons has control of both companies and the groups either consist of the same persons or could be so regarded if (in one or more cases) a member of either group were replaced by a person with whom the member is connected.

(6) A company is connected with another person (“A”) if—

(a) A has control of the company, or

(b) A together with persons connected with A have control of the company.

(7) In relation to a company, any two or more persons acting together to secure or exercise control of the company are connected with—

(a) one another, and

(b) any person acting on the directions of any of them to secure or exercise control of the company.

Meaning of “the Inland Revenue” etc.

576

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other definitions

577

(1) In this Act—

“dual resident investing company” has the same meaning as in section 949 of CTA 2010 (dual resident investing companies);

“market value”, in relation to any asset, means the price the asset would fetch in the open market;

“the normal time limit for amending a tax return”, in relation to a tax year, means the first anniversary of the 31st January following the tax year;

“notice” means a notice in writing;

“property business” means a UK property business ... or an overseas property business;

“ tax return ” has the meaning given by section 3(3);

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) Any reference to the setting up, commencement or permanent discontinuance of—

(a) a trade,

(b) a property business,

(d) a vocation,

includes, except where the contrary is expressly provided, the occurring of an event which, under any provision of the Income Tax Acts or Corporation Tax Acts, is to be treated as equivalent to the setting up, commencement or permanent discontinuance of a trade, property business, profession or vocation.

(2A) A person's ceasing to carry on a trade, property business, profession or vocation is treated for the purposes of this Act as the permanent discontinuance of the trade, property business, profession or vocation, whether or not it is in fact discontinued.

(2B) For income tax purposes, a change in the persons carrying on a trade, property business, profession or vocation is not treated as the permanent discontinuance of the trade, property business, profession or vocation if a person carrying it on immediately before the change continues to carry it on after the change.

(2C) For corporation tax purposes, a change in the persons carrying on a trade or property business is not treated as the permanent discontinuance of the trade or property business if a company carrying it on in partnership immediately before the change continues to carry it on in partnership after the change.

(3) Any reference in this Act to an allowance made includes an allowance which would be made but for an insufficiency of profits, or other income, against which to make it.

(4) For the purposes of this Act a person obtains a tax advantage if he—

(a) obtains an allowance or a greater allowance, or

(b) avoids a charge or secures the reduction of a charge.

(5) In Schedule 1—

(a) Part 1 gives the meaning of abbreviated references in this Act to Acts about tax, and

(b) Part 2 lists where expressions used in this Act are defined or otherwise explained.

Amendments, repeals, citation etc.

Consequential amendments

578

Schedule 2 contains consequential amendments.

Commencement and transitional provisions and savings

579

(1) This Act has effect—

(a) for income tax purposes, as respects allowances and charges falling to be made for chargeable periods ending on or after 6th April 2001, and

(b) for corporation tax purposes, as respects allowances and charges falling to be made for chargeable periods ending on or after 1st April 2001.

(2) References in this Act to a chargeable period to which this Act applies are to the chargeable periods given in subsection (1).

(3) Subsection (1) is subject to Schedule 3, which contains transitional provisions and savings.

Repeals

580

Schedule 4 contains repeals.

Citation

581

This Act may be cited as the Capital Allowances Act 2001.

Schedule 1

Part 1 — Abbreviations

Part 2 — Defined expressions

Schedule 2

The Taxes Management Act 1970 (c. 9)

Section 42 (procedure for making claims etc.)

1

In subsection (7), for paragraphs (c) and (d) substitute—

(c) sections 3, 83, 89, 129, 131, 135, 177, 183, 266, 268, 290, 355, 381 and 569 of the Capital Allowances Act; and (d) sections 40B(5), 40D, 41 and 42 of the Finance (No. 2) Act 1992.

Section 57 (regulations about appeals)

2

For subsection (3)(b) substitute—

(b) provisions corresponding to section 563 of the Capital Allowances Act (determination of apportionment affecting tax liability of two or more persons), and

Section 58 (proceedings in tax cases in Northern Ireland)

3

In subsection (3)(b), for “section 151 of the Capital Allowances Act 1990 (proceedings to which more than one taxpayer is a party)” substitute “ section 563 of the Capital Allowances Act (determination of apportionment affecting tax liability of two or more persons) ”.

Section 98 (special returns, etc.)

4

(1) In the Table, in column 1, omit “Sections 23(4) and 49(4) of the Capital Allowances Act 1990”.

(2) In the Table, in column 2, for “Sections 22B(4), 23(2), 33F(5), 48, 49(2), 51(6A) and 53(1H) of the Capital Allowances Act 1990” substitute “ Sections 43(5) and (6), 118 to 120, 145(2) and (3) and 203 of the Capital Allowances Act ”.

Schedule 3 (rules for assigning proceedings to General Commissioners)

5

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Finance Act 1982 (c. 39)

Section 137 (expenditure met by regional development plans to be disregarded for certain purposes)

6

Omit subsections (2), (3), (6) and (7).

The London Regional Transport Act 1984 (c. 32)

Schedule 5 (transitional provisions and savings)

7

In paragraph 5, omit paragraph (b) and the word “and” before it.

The Films Act 1985 (c. 21)

Section 6 (certification of films as British films)

8

In subsection (1), for “section 68 of the Capital Allowances Act 1990 (expenditure on production and acquisition of films etc.)” substitute “ section 40D of the Finance (No. 2) Act 1992 (election relating to tax treatment of films expenditure) ”.

Schedule 1 (certification of films as British films)

9

(1) In paragraph 2(1), for “section 68 of the Capital Allowances Act 1990” substitute “ section 40D of the Finance (No. 2) Act 1992 ”.

(2) In paragraph 3(1), for “section 68 of the Capital Allowances Act 1990” substitute “ section 40D of the Finance (No. 2) Act 1992 ”.

The Trustee Savings Banks Act 1985 (c. 58)

Schedule 2 (taxation)

10

In paragraph 1—

(a) in sub-paragraph (1), for “the Capital Allowances Act 1990” substitute “ the Capital Allowances Act 2001 ”, and

(b) in sub-paragraph (2), for “those Acts” substitute “ that Act ”.

The Income and Corporation Taxes Act 1988 (c. 1)

Section 43C (transfer of rent: exceptions, etc.)

11

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 43E (interposed lease: exceptions, etc.)

12

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 65A (Case V income from land outside UK: income tax)

13

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 70A (Case V income from land outside UK: corporation tax)

14

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 75 (expenses of management: investment companies)

15

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 83A (gifts in kind to charities, etc.)

16

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 84 (gifts to educational establishments)

17

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 87 (taxable premiums etc.)

18

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 91 (cemeteries)

19

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 91C (mineral exploration and access)

20

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 116 (arrangements for transferring relief)

21

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 117 (restriction on relief: individuals)

22

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 118 (restriction on relief: companies)

23

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 197C (definition of mileage profit)

24

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 198 (relief for necessary expenses)

25

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 343 (company reconstructions without a change of ownership)

26

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 359 (loan to buy machinery or plant)

27

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 379A (Schedule A losses)

28

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 384 (restrictions on right of set-off)

29

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) In subsection (10), omit the words following paragraph (b) ...

New section 384A (restriction of set-off of plant and machinery allowances)

30

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 389 (supplementary provisions relating to carry-back of terminal losses)

31

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 393A (losses: set off against profits of the same, or an earlier, accounting period)

32

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 395 (leasing contracts and company reconstructions)

33

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 397 (restriction of relief in case of farming and market gardening)

34

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 400 (write-off of government investment)

35

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 403ZB (amounts eligible for group relief: excess capital allowances)

36

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 407 (relationship between group relief and other relief)

37

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 411 (exclusion of double allowance)

38

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Sections 434D and 434E (capital allowances: management assets; investment assets)

39

Omit sections 434D and 434E.

Section 487 (credit unions)

40

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 492 (treatment of oil extraction activities etc. for tax purposes)

41

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 495 (regional development grants)

42

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 518 (harbour reorganisation schemes)

43

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Sections 520 to 523 (patents)

44

Omit sections 520 to 523.

Section 525 (capital sums: death, winding up or partnership change)

45

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 528 (patents: manner of making allowances and charges)

46

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 530 (disposal of know-how)

47

Omit section 530.

Section 531 (disposal of know-how: supplementary provisions)

48

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 532 (application of 1990 Act)

49

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 533 (interpretation of sections 520 to 532)

50

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 577 (business entertaining expenses)

51

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

New sections 578A and 578B (expenditure on car hire)

52

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 623 (retirement annuities: relevant earnings)

53

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 646 (meaning of “net relevant earnings”)

54

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 768 (change in ownership of company: disallowance of trading losses)

55

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 768B (change in ownership of investment company: deductions generally)

56

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 781 (assets leased to traders and others)

57

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 828 (orders and regulations made by the Treasury or the Board)

58

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 831 (interpretation of Act)

59

Section 831(3) continues to have effect with the addition of the definition of “the 1990 Act” (an amendment originally made by paragraph 8(35) of Schedule 1 to the Capital Allowances Act 1990 (c. 1)).

Section 832 (interpretation of the Tax Acts)

60

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 834 (interpretation of the Corporation Tax Acts)

61

In subsection (2), omit “and also for sections 144 and 145 of the 1990 Act”.

Section 835 (“total income” in the Income Tax Acts)

62

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Schedule 18 (group relief)

63

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Schedule 19AC (modification of Act in relation to overseas life insurance companies)

64

(1) Omit paragraph 9C (application of section 434D(4) in relation to overseas life insurance company).

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Schedule 21 (tax relief in connection with schemes for rationalising industry and other redundancy schemes)

65

In paragraph 6(1)(a), for “Part I or II of the 1990 Act in taxing the trade” substitute “ Part 2 or 3 of the Capital Allowances Act in calculating the profits of a trade ”.

Schedule 24 (assumptions for calculating chargeable profits, creditable tax and corresponding United Kingdom tax of foreign companies)

66

(1) In paragraph 10(1)—

(a) for “machinery or plant for the purposes of its trade, that machinery or plant shall be assumed, for the purposes of Part II of the 1990 Act” substitute “ plant or machinery for the purposes of its trade, that plant or machinery shall be assumed, for the purposes of Part 2 of the Capital Allowances Act ”, and

(b) for “section 81 of that Act (expenditure treated as equivalent to market value at the time the machinery or plant is brought into use)” substitute “ section 13 of that Act (use for qualifying activity of plant or machinery provided for other purposes) ”.

(2) In paragraph 10(2), for “Part II of the 1990 Act” substitute “ Part 2 of the Capital Allowances Act ”.

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Schedule 28A (change in ownership of investment company: deductions)

67

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Schedule 28AA (provision not at arms' length)

68

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Finance Act 1988 (c. 39)

Schedule 12 (building societies: change of status)

69

In paragraph 3(1), for “the Capital Allowances Act 1990 (capital allowances)” substitute “ the Capital Allowances Act 2001 ”.

The Finance Act 1989 (c. 26)

Section 86 (spreading of relief for acquisition expenses)

70

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Electricity Act 1989 (c. 29)

Schedule 11 (taxation provisions)

71

(1) For paragraph 5(3) substitute—

(3) Section 291(1) of the Capital Allowances Act 2001 (supplementary provisions with respect to elections) shall not prevent the application of section 290 of that Act (election to treat grant of lease exceeding 50 years as sale) where the lease is a lease to which this sub-paragraph applies.

(2) In paragraph 5(4)(a), for “section 44 of the Finance Act 1971 or section 24 of the 1990 Act” substitute “ Chapter 5 of Part 2 of the Capital Allowances Act 2001 ”.

(3) In paragraph 5(4)(b), for the words from “section 44” to “Chapter VI of Part II of the 1990 Act” substitute “ Chapters 5 and 14 of Part 2 of the Capital Allowances Act 2001 ”.

(4) For paragraph 5(5) substitute—

(5) In sub-paragraph (4) above “the transferor” means the transferor under the transfer scheme in question and expressions which are used in Chapter 14 of Part 2 of the Capital Allowances Act 2001 have the same meanings as in that Chapter; and in construing that sub-paragraph section 511(2) of the 1988 Act shall be disregarded.

The Finance Act 1990 (c. 29)

Section 126 (pools payments for football ground improvements)

72

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Finance Act 1991 (c. 31)

Section 65 (reimbursement by defaulter in respect of certain abandonment expenditure)

73

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

74

(1) In subsection (4)—

(a) for “Capital Allowances Act 1990” substitute “ Capital Allowances Act ”;

(b) for “machinery or plant” (in each place) substitute “ plant or machinery ”; and

(2) In subsection (5) for “machinery or plant” (in both places) substitute “ plant or machinery ”.

Schedule 2 (levy of Class 4 contributions with income tax)

75

(1) In paragraph 1, omit paragraph (b).

(2) In paragraph 2, omit the words from “subject to deduction” to the end.

Schedule 2 (levy of Class 4 contributions with income tax)

76

(1) In paragraph 1, omit paragraph (b).

(2) In paragraph 2, omit the words from “subject to deduction” to the end.

The Taxation of Chargeable Gains Act 1992 (c. 12)

Section 37 (consideration chargeable to tax on income)

77

In subsection (2), for paragraphs (a) and (b) substitute—

(a) taken into account in the making of a balancing charge under the Capital Allowances Act but excluding Part 10 of that Act, (b) brought into account as the disposal value of plant or machinery under Part 2 of that Act, or (c) brought into account as the disposal value of an asset representing qualifying expenditure under Part 6 of that Act.

Section 41 (restriction of losses by reference to capital allowances etc.)

78

(1) In subsection (3), for paragraphs (a) and (b) substitute—

(a) by a transfer by way of sale in relation to which an election under section 569 of the Capital Allowances Act was made, or (b) by a transfer to which section 268 of that Act applies,

(2) In subsection (4), for paragraph (a) substitute—

(a) any allowance under the Capital Allowances Act,

(3) In subsection (7)—

(a) for “machinery or plant” (in each place) substitute “ plant or machinery ”,

(b) for “Part II of the 1990 Act, and neither section 79 (assets used only partly for trade purposes) nor section 80 (wear and tear subsidies) of that Act” substitute “ Part 2 of the Capital Allowances Act, and neither Chapter 15 (assets provided or used only partly for qualifying activity) nor Chapter 16 (partial depreciation subsidies) of that Part ”, and

Section 195 (allowance of certain drilling expenditure)

79

(1) In subsection (2), for paragraphs (b) and (c) substitute—

(b) either it is expenditure in respect of which the person was entitled to an allowance under section 441 of the Capital Allowances Act (research and development allowances) for a relevant chargeable period which began before the date of the disposal or it would have been such expenditure if the trading condition had been fulfilled, and (c) on the disposal, section 443 of that Act (disposal values) applies in relation to the expenditure or would apply if the trading condition had been fulfilled (and the expenditure had accordingly been qualifying expenditure under Part 6 of that Act).

(2) In subsection (3)—

(a) for “section 137 of the 1990 Act” substitute “ section 441 of the Capital Allowances Act ”, and

(b) omit the definition of “basis year” and the word “and” before it.

(3) In subsection (4), for “trading receipt” substitute “ disposal value ” and for paragraphs (a) and (b) substitute—

(a) is required to be brought into account under section 443 of the Capital Allowances Act; or (b) would be required to be so brought into account if the trading condition had been fulfilled (and the expenditure had accordingly been qualifying expenditure under Part 6 of that Act).

(4) Omit subsection (5).

(5) In subsection (6)—

(a) for “which had not in fact been allowed or become allowable” substitute “ in respect of which the person had not in fact been entitled to an allowance ”,

(b) for “section 137 of the 1990 Act” substitute “ section 441 of the Capital Allowances Act ”, and

(6) In subsection (8), for “Part VII of the Capital Allowances Act 1990 (allowances for research and development expenditure)” substitute “ Part 6 of the Capital Allowances Act (research and development allowances) ”.

Section 288 (interpretation)

80

In subsection (1), omit the definition of “the 1990 Act” and after the definition of “building society” insert—

“the Capital Allowances Act” means the Capital Allowances Act 2001;

Schedule 3 (assets held on 31st March 1982)

81

In paragraph 7(8), for “section 121 of the 1990 Act” substitute “ section 394 of the Capital Allowances Act ”.

The Finance (No. 2) Act 1992 (c. 48)

New sections 40A to 40D (films)

82

Before section 41 insert—

(40A) (1) Expenditure incurred on the production or acquisition of a master version of a film is to be regarded for the purposes of the Tax Acts as expenditure of a revenue nature unless an election under section 40D below has effect with respect to it. (2) If expenditure on the master version of a film is regarded as expenditure of a revenue nature under subsection (1) above, sums received from the disposal of the master version are to be regarded for the purposes of the Tax Acts as receipts of a revenue nature (if they would not be so regarded apart from this subsection). (3) For the purposes of subsection (2) above sums received from the disposal of a master version of a film include— (a) sums received from the disposal of any interest or right in or over the master version, including an interest or right created by the disposal, and (b) insurance, compensation or similar money derived from the master version. (4) In this section— (a) “expenditure of a revenue nature” means expenditure which, if it were incurred in the course of a trade the profits of which are chargeable to tax under Case I of Schedule D, would be taken into account for the purpose of computing the profits or losses of the trade, and (b) “receipts of a revenue nature” means receipts which, if they were receipts of such a trade, would be taken into account for that purpose. (5) For the purposes of this section and sections 40B to 40D below, a “master version” of a film means a master negative, master tape or master audio disc of the film and includes any rights in the film (or its soundtrack) that are held or acquired with the master negative, master tape or master audio disc. (40B) (1) In computing the profits or gains accruing to any person from a trade or business which consists of or includes the exploitation of master versions of films, expenditure which is— (a) incurred on the production or acquisition of a master version of a film, and (b) expenditure of a revenue nature (whether as a result of section 40A above or otherwise), must be allocated to relevant periods in accordance with this section. (2) Subsection (1) above does not apply if an election under section 40D below has effect with respect to the expenditure. (3) In this section “relevant period” means— (a) a period for which the accounts of the trade or business concerned are made up, or (b) if no accounts of the trade or business concerned are made up for a period— (i) if the profits or gains accrue to a company within the charge to corporation tax, the accounting period of the company; (ii) in any other case, the period the profits or gains of which are taken into account in assessing the income of the trade or business for a year of assessment. (4) The amount of expenditure falling within subsection (1) above which falls to be allocated to any relevant period is so much as is just and reasonable, having regard to— (a) the amount of that expenditure which remains unallocated at the beginning of that period, (b) the proportion which the estimated value of the master version of the film which is realised in that period (whether by way of income or otherwise) bears to the aggregate of the value so realised and the estimated remaining value of the master version at the end of that period, and (c) the need to bring the whole of the expenditure falling within subsection (1) above into account over the time during which the value of the master version is expected to be realised. (5) In addition to any expenditure which is allocated to a relevant period in accordance with subsection (4) above, if a claim is made, there must also be allocated to that period so much of the unallocated expenditure as is specified in the claim and does not exceed the difference between— (a) the amount allocated to that period in accordance with subsection (4) above, and (b) the value of the master version of the film which is realised in that period (whether by way of income or otherwise). (6) A claim under subsection (5) above must be made— (a) for the purposes of income tax, on or before the first anniversary of the 31st January next following the year of assessment in which ends the relevant period mentioned in that subsection; (b) for the purposes of corporation tax, not later than two years after the end of the relevant period to which the claim relates. (7) In subsection (5) above “the unallocated expenditure”, in relation to a relevant period, is any expenditure falling within subsection (1) above— (a) which does not fall to be allocated to that period in accordance with subsection (4) above, and (b) which has not been allocated to any earlier relevant period in accordance with subsection (4) or (5) above. (40C) (1) To the extent that a deduction has been made in respect of any expenditure for a relevant period under section 42 below— (a) that expenditure must not be allocated under section 40B above, and (b) no other expenditure incurred on the production or acquisition of the master version of the film is to be allocated under section 40B above to the relevant period. (2) Section 40B above does not apply to the profits of a trade in which the master version of the film constitutes trading stock, as defined by section 100(2) of the Taxes Act 1988. (40D) (1) Sections 40A and 40B above do not apply to expenditure— (a) in relation to which an election is made under this section, and (b) which meets the conditions in subsection (2) below. (2) The conditions are that— (a) the expenditure is incurred— (i) by a person who carries on a trade or business which consists of or includes the exploitation of master versions of films, and (ii) on the production or acquisition of a master version of a film, (b) the master version is certified by the Secretary of State under paragraph 3 of Schedule 1 to the Films Act 1985 as a qualifying film, tape or disc for the purposes of this section, and (c) the value of the master version is expected to be realisable over a period of not less than two years. (3) An election under this section— (a) must relate to all expenditure incurred (or to be incurred) on the production or acquisition of the master version in question, (b) must be made by giving notice to an officer of Revenue and Customs, in such form as the Board of Inland Revenue may determine, and (c) is irrevocable. (4) Notice under subsection (3)(b) above must be given— (a) for the purposes of income tax, on or before the first anniversary of the 31st January next following the year of assessment in which ends the relevant period in which the master version of the film is completed; (b) for the purposes of corporation tax, not later than two years after the end of the relevant period in which the master version of the film is completed. (5) In subsection (4) above “relevant period” has the same meaning as in section 40B above. (6) For the purposes of subsection (4) above, the master version of a film is completed— (a) at the time when it is first in a form in which it can reasonably be regarded as ready for copies of it to be made and distributed for presentation to the public, or (b) if the expenditure in question was incurred on the acquisition of the master version and it was acquired after the time mentioned in paragraph (a) above, at the time it was acquired. (7) An election may not be made under this section in relation to expenditure on a master version of a film if a claim has been made in respect of any of that expenditure under section 41 or 42 below.

Section 41 (relief for preliminary expenditure)

83

In subsection (1)(c), for “section 68(9) of the 1990 Act” substitute “ section 40D above ”.

Section 42 (relief for production or acquisition expenditure)

84

(1) In subsection (1)(b)—

(a) for “subsections (3) to (6) of section 68 of the 1990 Act” substitute “ section 40B above ”, and

(b) for “subsection (9) of that section” substitute “ section 40D above ”.

(2) In subsection (4)(c), for “section 68(3) to (6) of the 1990 Act, section” substitute “ section 40B or ”.

(3) In subsection (7), for “section 68(3) to (6) of the 1990 Act” substitute “ section 40B above ”.

Section 43 (interpretation of sections 41 and 42)

85

In subsection (1)—

(a) for “41 and 42” substitute “ 40A to 42 ”,

(b) for “section 68(10) of the 1990 Act” substitute “ section 40A(4) above ”,

(d) for “section 68(3) of the 1990 Act” substitute “ section 40B(3) above ”, and

(e) omit the definition of “the 1990 Act”.

Schedule 10 (furnished accommodation)

86

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Schedule 17 (Northern Ireland electricity)

87

(1) In paragraph 5(4)—

(a) for “section 11 of the Capital Allowances Act 1990 (long leases)” substitute “ section 290 of the Capital Allowances Act 2001 (election to treat grant of lease exceeding 50 years as sale) ”,

(b) for “long lease within the meaning” substitute “ lease which satisfies the condition in subsection (1)(c) ”,

(d) in paragraph (b), for “section 11(6)(a)” substitute “ section 291(1) ”,

(e) for “sections 157 and 158” substitute “ sections 567 to 570 ”, and

(f) for “section 11” substitute “ section 290 ”.

(2) In paragraph 5(5)—

(a) for “paragraphs (a) and (b) of subsection (1) of section 55 of the Capital Allowances Act 1990 (expenditure incurred by incoming lessee: transfer of allowances)” substitute “ section 183(1)(a) and (b) of the Capital Allowances Act (incoming lessee where lessor entitled to allowances) ”,

(b) in paragraph (a) for “Part II of that Act” substitute “ Part 2 of that Act ”,

(d) omit paragraph (c) and the word “and” before it.

(3) In paragraph 6(1), for “section 11 of the Capital Allowances Act 1990” substitute “ section 290 of the Capital Allowances Act 2001 ”.

(4) In paragraph 6(4), for “section 55 of the Capital Allowances Act 1990” substitute “ section 183 of the Capital Allowances Act 2001 ”.

The Finance Act 1993 (c. 34)

Section 92 (the basic rule: sterling to be used)

88

In subsection (2)—

(a) for “section 28 or 61(1) of the Capital Allowances Act 1990”, substitute “ section 19 or 253 of the Capital Allowances Act ”, and

(b) for “section 28 or 61(1) of that Act” substitute “ section 19 or 253 of that Act ”.

Section 93 (use of currency other than sterling)

89

In subsection (5), for “section 22B, 34, 35, 38C, 38D or 79A of the Capital Allowances Act 1990” substitute “ section 578A(2) or (3) of the Taxes Act 1988 or section 43(3), 74(2), 75(1), 76(2), (3) or (4), 99(1), (2) or (3) or 208(1) of the Capital Allowances Act ”.

The Agriculture Act 1993 (c. 37)

Schedule 2 (provisions relating to carrying out approved schemes or reorganisation)

90

In paragraph 19(4) and (5)(b), for “the Capital Allowances Act 1990” substitute “ the Capital Allowances Act 2001 ”.

The Finance Act 1994 (c. 9)

Schedule 24 (provisions relating to the Railways Act 1993)

91

(1) In paragraph 1(1)—

(a) omit the definition of “the Allowances Act”,

(b) after the definition of “the Board” insert—

“the Capital Allowances Act” means the Capital Allowances Act 2001 and includes, where the context admits, enactments which under the Taxes Act 1988 are to be treated as contained in the Capital Allowances Act 2001;

and

(c) in the definition of “fixture”, for “Chapter VI of Part II of the Allowances Act” substitute “ Chapter 14 of Part 2 of the Capital Allowances Act ”.

(2) In paragraph 1(4)(c), for “the Capital Allowances Acts” substitute “ the Capital Allowances Act ”.

(3) In paragraph 20(1) and (2)(a), for “the Capital Allowances Acts” substitute “ the Capital Allowances Act ”.

(4) In paragraph 20(8), for “section 77 of the Allowances Act (successions to trades: connected persons)” substitute “ sections 266 and 267 of the Capital Allowances Act (election where predecessor and successor are connected persons) ”.

(5) In paragraph 21(1), for “the Capital Allowances Acts” substitute “ the Capital Allowances Act ”.

(6) In paragraph 21(2)—

(a) in paragraph (a), for “subsection (6) of section 21 of the Allowances Act (transfer of industrial buildings or structures to be deemed to be sale at market price)” substitute “ section 573 of the Capital Allowances Act (transfers treated as sales) as it applies for the purposes of Part 3 of that Act ”,

(b) in paragraph (b), for “that subsection” substitute “ that section ” and for “the Capital Allowances Acts” substitute “ that Act ”, and

(c) for “by virtue of that subsection or any other provision of those Acts), sections 157 and 158 of the Allowances Act” substitute “ under that section or any other provision of the Capital Allowances Act), sections 567 to 570 of that Act ”.

(7) In paragraph 21(3)—

(a) for “the Capital Allowances Acts” substitute “ the Capital Allowances Act ”,

(b) for “those Acts” substitute “ that Act ”,

(c) in paragraph (a), for “section 26(1) or 59 of the Allowances Act” substitute “ section 61(2) to (4), 72(3) to (5), 171, 196 or 423 of the Capital Allowances Act ”, and

(d) in paragraph (c), for “section 54” substitute “ sections 181(1) and 182(1) ”.

(8) In paragraph 22(2)—

(a) for “building or structure” (in both places) substitute “ building ”,

(b) for “Part I of the Allowances Act” substitute “ Part 3 of the Capital Allowances Act ”, and

(9) In paragraph 22(3)—

(a) for “machinery or plant” (in the first and second places) substitute “ plant or machinery ”,

(b) for “section 24 of the Allowances Act (balancing adjustments) shall, subject to section 26(2) and (3) of that Act (disposal value of machinery or plant not to exceed capital expenditure incurred on its provision)” substitute “ section 55 of the Capital Allowances Act (determination of entitlement or liability) shall, subject to section 62 of that Act (general limit on amount of disposal value) ”, and

(10) In paragraph 22(4)—

(a) for “section 57(2) of the Allowances Act” substitute “ section 188 of the Capital Allowances Act ”,

(b) for “section 24 of that Act shall, subject to section 26(2) and (3)” substitute “ section 55 of that Act shall, subject to section 62 ”,

(d) for “the Capital Allowances Acts” substitute “ the Capital Allowances Act ”.

Schedule 25 (Northern Ireland Airports Limited)

92

(1) In paragraph 5(2), for “the 1990 Act” (in both places) substitute “ the Capital Allowances Act 2001 ”.

(2) In paragraph 5(3)—

(a) omit the definition of “the 1990 Act”,

(b) for “section 4 of the 1990 Act” substitute “ Chapter 7 of Part 3 of the Capital Allowances Act 2001 ”, and

The Coal Industry Act 1994 (c. 21)

Schedule 4 (taxation provisions)

93

(1) In paragraph 1(2)—

(a) after the definition of “the 1988 Act” insert—

“the Capital Allowances Act” includes, where the context admits, enactments which under the 1988 Act are to be treated as contained in the Capital Allowances Act,

and

(b) in the definition of “fixture”, for “Chapter VI of Part II of the 1990 Act” substitute “ Chapter 14 of Part 2 of the Capital Allowances Act ”.

(2) In paragraph 19(1) and (2), for “the Capital Allowances Acts” substitute “ the Capital Allowances Act ”.

(3) In paragraph 19(3)(b) and (4)(b), for “section 145(2) of the 1990 Act” substitute “ section 260 of the Capital Allowances Act ”.

(4) In paragraph 20(1), for “the Capital Allowances Acts” substitute “ the Capital Allowances Act ”.

(5) In paragraph 20(2)—

(a) in paragraph (a), for “subsection (6) of section 21 of the 1990 Act (transfer of industrial buildings or structures to be deemed to be sale at market price)” substitute “ section 573 of the Capital Allowances Act (transfers treated as sales) as it applies for the purposes of Part 3 of that Act ”,

(b) in paragraph (b), for “that subsection (6)” substitute “ that section ” and for “the Capital Allowances Acts” substitute “ that Act ”,

(d) for “those Acts), sections 157 and 158 of the 1990 Act” substitute “ that Act), sections 567 to 570 of that Act ”.

(6) In paragraph 20(3)—

(a) for “the Capital Allowances Acts” substitute “ the Capital Allowances Act ”,

(b) for “those Acts” substitute “ that Act ”,

(c) in paragraph (a), for “section 26(1) or 59 of the 1990 Act” substitute “ section 61(2) to (4), 72(3) to (5), 171, 196 or 423 of the Capital Allowances Act ”, and

(d) in paragraph (c), for “section 54” substitute “ sections 181(1) and 182(1) ”.

(7) In paragraph 20(4), for “under section 99 of the 1990 Act (disposal receipts in relation to mineral extraction allowances)” substitute “ in accordance with sections 421 to 425 of the Capital Allowances Act (mineral extraction allowances: disposal receipts) ”.

(8) In paragraph 20(5)—

(a) in paragraph (a), for “Part V of the 1990 Act (agricultural buildings etc.)” substitute “ Part 4 of the Capital Allowances Act (agricultural buildings allowances) ” and for “section 129(2)” substitute “ section 382 ”,

(b) in paragraph (b), for “the Capital Allowances Acts” substitute “ that Act ”, and

(c) for “section 128(2) of that Act (calculation of balancing allowance or charge)” substitute “ section 385 of the Capital Allowances Act (calculation of balancing adjustment) ”.

(9) In paragraph 20(6)—

(a) in paragraph (a), for “relevant event for the purposes of section 138 of the 1990 Act (assets representing allowable scientific research expenditure ceasing to belong to traders)” substitute “ disposal event for the purposes of Chapter 3 of Part 6 of the Capital Allowances Act (research and development allowances: allowances and charges) ”,

(b) in paragraph (b), for “subsection (2) of that section” substitute “ that Chapter ”, and

(10) In paragraph 20(7)—

(a) for “the 1990 Act” substitute “ the Capital Allowances Act ”, and

(b) for “section 157(1)(a)” substitute “ section 568(1)(a) ”.

(11) In paragraph 21(2), for “the Capital Allowances Acts” substitute “ the Capital Allowances Act ”.

(12) In paragraph 21(3)—

(a) for “Chapter VI of Part II of the 1990 Act” substitute “ Chapter 14 of Part 2 of the Capital Allowances Act ”,

(b) for “the Capital Allowances Acts” substitute “ the Capital Allowances Act ”,

(d) for “those Acts” substitute “ that Act ”.

(13) In paragraph 21(4)—

(a) for “section 61 of the 1990 Act” substitute “ section 70 of the Capital Allowances Act ”,

(b) for “the Capital Allowances Acts” substitute “ the Capital Allowances Act ”,

(14) In paragraph 22, for “Part II of the 1990 Act” substitute “ Part 2 of the Capital Allowances Act ”.

The Atomic Energy Authority Act 1995 (c. 37)

Schedule 3 (taxation provisions)

94

(1) In paragraph 14(1), for the definition of “the Capital Allowances Acts” substitute—

“the Capital Allowances Act” means the Capital Allowances Act 2001 and includes, where the context admits, enactments which under the 1988 Act are to be treated as contained in the Capital Allowances Act 2001.

(2) In paragraph 14(3), for “Capital Allowances Acts” substitute “ Capital Allowances Act ”.

(3) For paragraph 15 substitute—

(15) Where any transfer effected by a transfer scheme is a relevant event for the purposes of section 311 of the Capital Allowances Act, the Secretary of State may for the purposes of that section by order make provision specifying the values to be assigned to RQE and B in relation to that event.

(4) In paragraph 16—

(a) for the heading substitute “ Plant and machinery ”, and

(b) for “Part II of the Capital Allowances Act 1990 (capital allowances in respect of machinery and plant)” substitute “ Part 2 of the Capital Allowances Act (plant and machinery allowances) ”.

(5) For paragraph 17 substitute—

(17) (1) For the purposes of Part 6 of the Capital Allowances Act (research and development allowances) a successor company in which an asset representing allowable research and development expenditure is vested in accordance with a transfer scheme shall be treated as having incurred, on the date on which the transfer scheme comes into force, capital expenditure of the prescribed amount on the research and development in question; and that research and development shall be taken to have been directly undertaken by the successor company or on its behalf. (2) In sub-paragraph (1) above “allowable research and development expenditure” means capital expenditure incurred by the Authority on research and development directly undertaken by the Authority or on their behalf. (3) In this paragraph— - “asset” includes part of an asset; - “research and development” has the same meaning as in Part 6 of the Capital Allowances Act; and references to expenditure incurred on research and development shall be construed in accordance with section 438 of that Act.

(6) In paragraph 18(1), for “section 520 of the 1988 Act (allowances for expenditure on purchase of patent rights)” substitute “ section 468 of the Capital Allowances Act (qualifying trade expenditure) ”.

(7) In paragraph 18(2), for “section 533 of the 1988 Act” substitute “ section 464(2) of the Capital Allowances Act ”.

(8) In paragraph 19(1), for “section 530 of the 1988 Act (disposal of know-how)” substitute “ section 454 of the Capital Allowances Act (qualifying expenditure) ”.

(9) In paragraph 19(2), after “Subsections (2) and (7) of section 531 of the 1988 Act (provisions supplementary to section 530)” insert “ and subsections (2) and (3) of section 455 of the Capital Allowances Act (excluded expenditure) ”.

(10) In paragraph 19(3), for “section 533(7) of the 1988 Act” substitute “ section 452(2) of the Capital Allowances Act ”.

(11) In paragraph 20, for “Part II of the Capital Allowances Act 1990 (machinery and plant)” substitute “ Parts 2, 7 and 8 of the Capital Allowances Act (plant and machinery, know-how and patents) ”.

(12) In paragraph 22, for “Capital Allowances Acts” substitute “ Capital Allowances Act ”.

The Finance Act 1996 (c. 8)

Section 151 (benefits under pilot schemes)

95

In subsection (2), for “section 153 of the Capital Allowances Act 1990 (subsidies etc.)” substitute “ section 532 of the Capital Allowances Act (exclusion of expenditure met by contributions) ”.

Schedule 8 (loan relationships)

96

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Broadcasting Act 1996 (c. 55)

Schedule 7 (transfer schemes relating to BBC transmission network: taxation provisions)

97

(1) in paragraph 1(1), omit the definition of “the Allowances Act” and for the definition of “the Capital Allowances Acts” substitute—

“the Capital Allowances Act” means the Capital Allowances Act 2001 and includes, where the context admits, enactments which under the Taxes Act 1988 are to be treated as contained in the Capital Allowances Act 2001.

(2) In paragraph 1(3)(b), for “the Capital Allowances Acts” substitute “ the Capital Allowances Act ”.

(3) In paragraph 12(3)—

(a) for “the Capital Allowances Acts” substitute “ the Capital Allowances Act ”, and

(b) for “those Acts” substitute “ that Act ”.

(4) In paragraph 13(1)—

(a) in the heading, omit “and structures”, and

(b) for “Part I of the Allowances Act (industrial buildings and structures)” substitute “ Part 3 of the Capital Allowances Act (industrial buildings allowances) ”.

(5) In paragraph 13(2), for “Part I of the Allowances Act” substitute “ Part 3 of the Capital Allowances Act ”.

(6) In paragraph 14(1)—

(a) in the heading, for “machinery and plant” substitute “ plant and machinery ”, and

(b) for “Part II of the Allowances Act (capital allowances in respect of machinery and plant)” substitute “ Part 2 of the Capital Allowances Act (plant and machinery allowances) ”.

(7) In paragraph 15(2)—

(a) for “paragraphs (a) and (b) of subsection (1) of section 55 of the Allowances Act (expenditure incurred by incoming lessee: transfer of allowances)” substitute “ section 183(1)(a) and (b) of the Capital Allowances Act (incoming lessee where lessor entitled to allowances) ”,

(b) for “Part II” substitute “ Part 2 ”, and

(8) In paragraph 15(3)—

(a) for “paragraphs (a), (c) and (d) of section 56 of the Allowances Act (expenditure incurred by incoming lessee: lessor not entitled to allowances)” substitute “ section 184(1)(a) to (c) of the Capital Allowances Act (incoming lessee where lessor not entitled to allowances) ”, and

(b) for “Part II” substitute “ Part 2 ”.

(9) In paragraph 16, for “Part II of the Allowances Act (machinery and plant)” substitute “ Part 2 of the Capital Allowances Act (plant and machinery allowances) ”.

(10) For paragraph 17 substitute—

(17) (1) This paragraph applies where there is a relevant transfer of property which is the relevant interest in relation to any expenditure for which the BBC would be entitled to an allowance (other than a balancing allowance) under Part 4 of the Capital Allowances Act (agricultural buildings allowances). (2) Where this paragraph applies, then, as respects the transferee— (a) his acquisition of the relevant interest shall be treated for the purposes of Part 4 of the Capital Allowances Act as a balancing event within subsection (2)(a) of section 381 (regardless of the lack of any election); and (b) section 376(2) shall apply as if— (i) the value to be assigned to RQE (residue of qualifying expenditure immediately after event) were the prescribed amount; and (ii) the value to be assigned to B (remaining writing-down period) were such as the Secretary of state may by order specify. (3) This paragraph shall not have effect in relation to any property if paragraph 12(3) has effect in relation to it.

The Finance Act 1997 (c. 16)

Schedule 12 (leasing arrangements: finance leases and loans)

98

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Finance (No. 2) Act 1997 (c. 58)

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

99

(1) In subsection (1), for “section 68(3) to (6) of the 1990 Act, section” substitute “ section 40B or ”.

(2) For subsection (9) substitute—

(9) Subsections (1) to (5) of section 5 of the Capital Allowances Act 2001 (when capital expenditure is incurred) apply for determining when for the purposes of this section any expenditure is incurred as they apply for determining when for the purposes of that Act any capital expenditure is incurred, but as if, in subsection (6) of that section, “at an earlier time” were substituted for “in an earlier chargeable period”.

The Finance Act 1998 (c. 36)

100

(1) In subsection (1), at the end of paragraph (b), insert “ and ”.

(2) For subsection (1)(d) and the word “and” before it substitute—

and also make provision in relation to claims for allowances under the Capital Allowances Act.

Section 118 (claims for income tax purposes)

101

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Schedule 6 (adjustment on change of accounting basis)

102

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

103

(1) For paragraph 78 (application of Part IX of the Schedule) substitute—

(78) This Part of this Schedule applies to claims for allowances under the Capital Allowances Act which— (a) are made for corporation tax purposes, and (b) are required under section 3 of that Act to be included in a tax return.

(2) For paragraph 79(1) (claim to be included in company tax return) substitute—

(79) (1) A claim for capital allowances must be included in the claimant company’s company tax return for the accounting period for which the claim is made.

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