24A |
Capital Allowances |
This chapter has been rewritten to take account of the Capital Allowances Act 2001, which is the first major product of the Tax Law Rewrite Project. It is based on a draft Bill published in July 2000; the draft Bill also has a commentary which will no doubt be referred when issues of interpretation arise. FA 2001 makes some minor corrections to CAA 2001. Since CAA 2001 is almost entirely an exercise in rewriting the existing law in a new drafting style rather than making substantial changes, it applies for chargeable periods ending on or after 6 April 2001 (income tax) 1 April 2001 (corporation tax). Where the new Act makes a change in the law, the taxpayer may elect for the old law treatment for the period straddling those dates.1 |
The 2001 Act sensibly begins with general provisions affecting all allowances before passing on to the individual allowances. These are placed in a new order reflecting the current commercial world. Allowances for Plant and Machinery, part 2 of the Act, sections 10–270, are followed by those for Industrial Buildings, part 3 sections 271–360, Agricultural Buildings, part 4 sections 361–393, Flat Conversions, part 4A, added by FA 2001, sections 393A–393W, Mineral Extraction, part 5 sections 394–436, Research and Development, part 6 sections 437–451, Know How, part 7 sections 452–463, Patents, part 8 sections 464–483, Dredging, part 9 sections 484–489, and Assured Tenancy, part 10 sections 490–531. Part 10 has expired in that claims cannot be made for new expenditure but existing allowances still run; hence CAA section 570A, the anti-avoidance rule introduced by FA 2003 and explained at §24A.3.6 applies here also. The high number of sections as compared with the 1990 Act is attributable to the new style of drafting.2 This statutory order of parts 2 and 3 is a reversal of previous practice in legislation on capital allowances and reflects, at last, the change in the economic importance of the different allowances since 1945. The present chapter follows the new scheme save that Assured Tenancies are dealt with under Industrial Buildings instead of as a separate head. |
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Footnotes have been renumbered. |