Finance Act 2014

Amendment of Chapter 2 of Part 9 of Principal Act (machinery or plant: initial allowances, wear and tear allowances, balancing allowances and balancing charges)

40. (1) Chapter 2 of Part 9 of the Principal Act is amended—

(a) in section 288 by substituting the following for subsection (3C):

“(3C) Notwithstanding subsection (3), a balancing charge shall not be made by reference to a wear and tear allowance made to a company (in this subsection referred to as the ‘first-mentioned company’) in respect of capital expenditure incurred on the provision of a specified intangible asset (within the meaning of section 291A) where an event referred to in subsection (1) occurs more than 5 years after the beginning of the accounting period of the company in which the asset was first provided, but if—

(a) that event, or any scheme or arrangement which includes that event, results in a company which is connected (within the meaning of section 10) with the first-mentioned company incurring capital expenditure on the specified intangible asset, and

(b) for the purposes of this Chapter and Chapter 4, the amount of that expenditure would, apart from this subsection, exceed the amount still unallowed, at the time of the event, of capital expenditure incurred by the first-mentioned company on the provision of that asset,

the amount of such expenditure shall be deemed, for those purposes, to be equal to the said amount still unallowed.”,


(b) in section 291A—

(i) in subsection (1), in paragraph (g) of the definition of “specified intangible asset”, by substituting “section 768 and, except where such asset is provided directly or indirectly in connection with the transfer of a business as a going concern, customer lists” for “section 768”, and

(ii) in subsection (6)(a) by deleting “80 per cent of”.

(2) (a) Paragraph (a) of subsection (1) applies as respects any event referred to in section 288(1) of the Principal Act which occurs on or after 23 October 2014.

(b) Paragraph (b) of subsection (1) has effect for accounting periods commencing on or after 1 January 2015.