56

Endnotes

¹ CAA 2001, s 579 and sch 3, esp para 8.
² See Pearce [2001] BTR 359. Amendments to other parts of the tax legislation are set out in sch 2.
³ See above Ñ22.5 and Coltness Iron Co v Black (1881) 6 App Cas 315, 1 TC 311.
⁴ See above at Ñ22.4(9) (p 412).
⁵ On history, see Royal Commission on the Taxation of Profits and Income, Final Report, Cmnd 9474 (1955), ÑÑ308–26; Richardson Committee on Turnover Taxation, Cmnd 2300 (1964) ch 6; and Edwards [1976] BTR 300 and below at Ñ24A.10.2.
⁶ To be found in CAA 1990, s 18(1)(a) now superseded by CAA 2001, s 274.
⁷ See below at Ñ25.2.3 (CAA 2001, s 248); see also Ibid, sections 249 (furnished holiday lettings) and 250 (overseas property business).
⁸ See below at Ñ24A.10.2.
⁹ In 1954 an investment allowance was introduced, which was, in effect, a tax-free subsidy. It did not reduce the depreciable cost of the asset for other allowances, nor was it taken into account for the purpose of any balancing allowance or charge. See, further, Cmnd 9667. It was abolished in 1966, FA 1966, s 35.
¹⁰ The difference is that an initial allowance and a writing down allowance can be claimed in the first year; however a first year allowance and a writing down allowance cannot both be claimed in the first year.
¹¹ Eg for Plant and Machinery, CAA 2001, ss 55(3) and 247–252 . For other types of allowance see ss 352, 391, 432, 450, 463, 478 and 489. In IRC v Wood Bros (Birkenhead) Ltd [1959] AC 487, 38 TC 275 the House of Lords held that the balancing charge was not income of the company for the purpose of the surtax direction. This was reversed for the apportionment of the income of close companies under the 1965 scheme.
¹² CAA 2001, s 4(2).
¹³ CAA 2001, s 4(4) and exception in (5).
¹⁴ For example Rose & Co. (Wallpaper and Paints) v Campbell [1968] 1 All ER 405, 44 TC 500 (pattern books of current wallpaper stock not capital expenditure).
¹⁵ CAA 2001, s 532 et seq.
¹⁶ CAA 2001, s 534; and see Birmingham Corpn v Barnes [1935] AC 292, 19 TC 195. See also ESC B 49 for allowances where the grant to the taxpayer is revoked.
¹⁷ CAA 2001, ss 537–541; see also s 155.
¹⁸ Ibid, s 7–10.
¹⁹ CAA 2001, s 11(4).
²⁰ [1978] STC 460, [1978] 2 All ER 1111.
²¹ [1983] STC 95.
²² CAA 2001, s 5(1); see also Inland Revenue interpretation RI 54.
²³ CAA 2001, s 5(4).
²⁴ Ibid, s 5(5).
²⁵ Ibid, s 5(5).
²⁶ Ibid, s 5(6).
²⁷ [1992] STC 226, 64 TC 617, HL (see above at Ñ5.6.4); on US experience, see Shaviro (1989) 43 Tax Law Review 401.
²⁸ [1989] STC 705, 769, 64 TC 617, 705.
²⁹ [1992] STC 226, 246, 64 TC 617, 747–8.
³⁰ Ibid, 233, 733.
³¹ For Revenue treatment of ‘security’ arrangements in relation to the special allowances for films, see Statement of Practice SP 1/98, paras 66–68.
³² See, for Plant and Machinery CAA 2001, s 247 and for other allowances ss 352, 391, 392, 432, 450, 463, 478, 489 and 529.
³³ Ibid, ss 3(4) and (5); on partnership returns, see ss 3(6) and 258.
³⁴ CAA 2001; the list of sections is the same as in n 32.
³⁵ CAA 2001, s 3(2); a very few are made under TMA s 42—see s 3(4). For treatment under self-assessment under corporation tax, see FA 1998, sch 18, pt IX.
³⁶ CAA 2001, ss 248–262 .
³⁷ CAA 2001, s 3(1), confirming Elliss v BP Oil Northern Ireland Refinery Ltd [1987] STC 52, 59 TC 474, CA.
³⁸ CAA 2001, s 566.
³⁹ Defined in Ibid, s 6.
⁴⁰ See CAA 1990, s 160 original version. Periods can no longer coincide, so those words which appear in s 160(6) are not repeated in s 6.
⁴¹ Ibid, s 161(2), as amended by FA 1994.
⁴² CAA 2001, s 6(4), s 160(2), substituted by FA 1994, s 212.
⁴³ Ibid, s 6(5).
⁴⁴ Ibid, s 6(6).
⁴⁵ Ibid, s 6(2)(b).
⁴⁶ CAA 2001, s 3 and, for leasing businesses, ss 258–261; on agricultural buildings, see ss 391 and 392, esp 392(3).
⁴⁷ TA 1988, ss 75, 76; see CAA 2001, ss 253–257.
⁴⁸ CAA 2001, s 6(2).
⁴⁹ CAA s 567. Plant and Machinery have their own rules, Ibid, s 214.
⁵⁰ Defined in TA 1988, s 832(1).
⁵¹ Defined in CAA 2001, s 574.
⁵² Defined in Ibid, ss 574 and 575 and TA 1988, s 839. Allowances under CAA 2001, parts 4 or 4A are excluded (s 570(1)).
⁵³ CAA 2001, s 570(2)(a).
⁵⁴ CAA 2001, s 570(5).
⁵⁵ Ibid, s 570(2)(b). (See below at Ñ58.6).
⁵⁶ Ibid, s 567(4); see Barclays Mercantile Industrial Finance Ltd v Melluish [1990] STC 314, 63 TC 95.
⁵⁷ Ibid, s 569(1)(b).
⁵⁸ Ibid, s 567(5) excludes ss 568–570; s 561(2) applies instead.
⁵⁹ Ibid, s 561, esp subs (1)(c).
⁶⁰ Ibid, ss 214 et seq (see below at Ñ24A.4.7) and for successions etc s 567(1).
⁶¹ Ibid, s 455.
⁶² Ibid, ss 562 and 572(1)–(3).
⁶³ CAA 2001, s 562; eg Fitton v Gilders and Heaton (1955) 36 TC 233; A Wood & Co Ltd v Provan (1968) 44 TC 701.
⁶⁴ See above at Ñ20.8 and below at Ñ47.2.
⁶⁵ Ibid, ss 265–268.
⁶⁶ Ibid, s 561, esp subs (1)(c).
⁶⁷ Ibid, s 558; see FA 2001, sch 21, para 4 correcting CAA 2001, s 558.
⁶⁸ Ibid, s 559.
⁶⁹ Ibid, s 557 excludes part 6 as well as parts 2 and 10.
⁷⁰ Ibid, s 7(1).
⁷¹ CAA 2001, s 6(2).
⁷² For example G H Chambers (Northiam Farms) Ltd v Watmough [1956] 3 All ER 485, 36 TC 711, where an extravagant choice of motor car for personal reasons led to a reduction in the allowance.
⁷³ CAA 2001, ss 39–52. It was not possible to claim both the first year allowance and the writing down allowance for the same period—which is why the allowance is called a first year allowance rather than an initial allowance.
⁷⁴ Ibid, ss 52 and 56.
⁷⁵ Ibid, ss 47–49.
⁷⁶ On current scope of first year allowances, see Ibid, ss 39–51 and below Ñ24A.3.5.
⁷⁷ CAA 2001, s 45.
⁷⁸ CAA 2001, s 45A.
⁷⁹ CAA 1990, s 22(2); for history and avoiding Hybrid Bill status, see Lawson, Memoirs, 354.
⁸⁰ CAA 2001, ss 15–20.
⁸¹ Ibid, ss 205–208.
⁸² Ibid, 11(4), 205–207.
⁸³ Ibid, s 270.
⁸⁴ Ibid, ss 209–212.
⁸⁵ Ibid, s 265.
⁸⁶ Ibid, s 213 et seq, below Ñ24A.2.15.
⁸⁷ CAA 1990 s 81; the gift is treated as a purchase from the donor for this amount for the purposes of s 75.
⁸⁸ CAA 2001, s 13 (change of purpose) and 14 (acquisition as gift) original versions added by FA 2000 s 75.
⁸⁹ CAA 2001, s 15(1) added by FA 2000, s 75; naturally this does not apply to those parts of the CAA which already refer to activities outside the UK.
⁹⁰ CAA 2001, s 208, original version added by FA 2000, s 75.
⁹¹ See also ESC B16 concerning expenditure on fire safety in Northern Ireland and by lessors
⁹² CAA 1990, s 65.
⁹³ Ibid, s 15.
⁹⁴ Ibid, ss 15 and 247.
⁹⁵ Ibid, ss 16 and 248.
⁹⁶ Ibid, ss 17 and 249.
⁹⁷ Ibid, ss 15 and 250.
⁹⁸ Ibid, ss 15 and 251.
⁹⁹ Ibid, ss 18 and 253; on life assurance businesses, see ss 254–257.
¹⁰⁰ Ibid, ss 19 and 258–261.
¹⁰¹ See above nn 93–100.
¹⁰² Ibid, s 15(1).
¹⁰³ Ibid, ss 15 and 36; see also ss 20 (excluding certain offices, etc) and 262.
¹⁰⁴ White v Higginbotham [1983] STC 143, 57 TC 2839 (no allowance for audio visual aids for clergyman).
¹⁰⁵ On the absence of a tax charge where a computer was provided by the employer, see above at Ñ17.5.
¹⁰⁶ CAA 2001, s 80, added by FA 1996.
¹⁰⁷ CAA 2001, s 36. This partly mirrors the distinction between travelling and other expenses in TA 1988, s 198.
¹⁰⁸ FA 2001, s 59 amending CAA 2001, s 36; on ministerial statement, see Standing Committee A 1 May 2001.
¹⁰⁹ FA 1994, s 118(3). The Board is given a discretion to extend this period by FA 1994, s 118(5) and Statement of Practice SP 6/94.
¹¹⁰ See generally, Inland Revenue Press Release, 30 November 1993, (1993) Simon’s Tax Intelligence 1539.
¹¹¹ FA 2000, s 73.
¹¹² CAA 2001, ss 11(4)(b) and 52(1)(b); for earlier rules, see CAA 1990, ss 22(1)(b), 24(1)(b).
¹¹³ [1984] STC 204, [1984] 1 All ER 849, CA; see Scott [1985] BTR 46. Contrast the ‘relevant interest’ rules for industrial buildings (below at Ñ24A.3.3). See also Melluish v BMI (No 3) Ltd [1995] STC 964, 68 TC 1.
¹¹⁴ The landlord (to whom the lifts did belong) could not claim an allowance because it had not incurred the expenditure.
¹¹⁵ [1995] STC 964, 68 TC 1.
¹¹⁶ Ibid, 971, 974, 71–72, 75, per Lord Browne-Wilkinson.
¹¹⁷ Bolton v International Drilling Ltd [1983] STC 70, 56 TC 449.
¹¹⁸ CAA 2001, s 11(4)(a).
¹¹⁹ CAA 1990, s 53(1A)–(1C) added by FA 1997, sch 16, para 3 now superseded by CAA 2001, ss 172–204.
¹²⁰ Now CAA 2001, ss 172–204. Before 1984 matters were dealt with by concesssion; the taxpayers in Stokes v Costain were apparently not willing to agree to one of the conditions in that concession.
¹²¹ Defined in CAA 2001, ss 173–175 and 202.
¹²² Under ibid, ss 172(5) and 537.
¹²³ Decaux v Francis [1996] STC (SCD) 281.
¹²⁴ FA 2000, s 79 amending CAA s 53; see now CAA 2001, ss 180 and 203.
¹²⁵ FA 2000, s 78 amending CAA s 51; see now ss 172(1) and 173(1) and (2).
¹²⁶ CAA 2001, s 204.
¹²⁷ Ibid, ss 177–180 and 192–196.
¹²⁸ Ibid, s 183; and where the lessee would be entitled to the allowance, but the lessor would not (s 184).
¹²⁹ Ibid, s 181.
¹³⁰ Ibid, s 188–191.
¹³¹ Melluish v BMI (No 3) Ltd [1995] STC 964, 980b, 68 TC 1, 82I, HL, per Lord Browne-Wilkinson.
¹³² CAA 2001, ss 9 and 182–184, original version added by FA 1997, sch 16, para 4.
¹³³ CAA 2001, s 197, original version added by FA 1997, sch 16, para 5.
¹³⁴ CAA 2001, s 198, original version added by FA 1997, sch 16, para 6.
¹³⁵ CAA 2001, s 203.
¹³⁶ IRC v Barclay Curle & Co Ltd [1969] 1 All ER 732, 45 TC 221 (see below at Ñ24A.2.4); the area of overlap has been reduced by the new statutory rules on when setting is plant.
¹³⁷ Double allowances are excluded by CAA 2001, s 7.
¹³⁸ (1887) 19 QBD 647 at 658.
¹³⁹ Lord Donovan in IRC v Barclay Curle & Co Ltd [1969] 1 All ER 732, 751, 45 TC 221, 249.
¹⁴⁰ Caledonian Rly Co v Banks (1880) 1 TC 487.
¹⁴¹ LCC v Edwards (1909) 5 TC 383.
¹⁴² Hinton v Maden and Ireland Ltd [1959] 3 All ER 356, 38 TC 391 (expected to last only 3 years); noted at [1959] BTR 454.
¹⁴³ Dumbarton Harbour Board v Cox (1918) 7 TC 147.
¹⁴⁴ Earl of Derby v Aylmer [1915] 3 KB 374, 6 TC 665.
¹⁴⁵ McVeigh v Arthur Sanderson & Sons Ltd [1969] 2 All ER 771, 775, per Cross J; noted at [1969] BTR 130.
¹⁴⁶ Munby v Furlong [1977] STC 232, [1977] 2 All ER 953.
¹⁴⁷ Barclays Mercantile Industrial Finance Ltd v Melluish [1990] STC 314, 63 TC 93, 122.
¹⁴⁸ Jarrold v John Good & Sons Ltd [1963] 1 All ER 141, 40 TC 681.
¹⁴⁹ On boundary between capital and revenue, note Inland Revenue interpretation RI 56.
¹⁵⁰ Barclays Mercantile Industrial Finance Ltd v Melluish [1990] STC 314, 63 TC 93, 122.
¹⁵¹ CAA 2001, s 71, predecessor originally added by F (No 2) A 1992, s 68.
¹⁵² Ibid, s 72; on limits, see s 73.
¹⁵³ HC Official Report, Standing Committee B, col 351, 25 June 1992. Quaere whether the courts will use the definition in the Copyright, Designs and Patents Act 1988.
¹⁵⁴ Originally added by FA 1994, s 117.
¹⁵⁵ CAA 2001, ss 27–33; on application of thermal insulation on industrial buildings to overseas property business, see FA 2001, sch 21, para 1 amending CAA 2001, s 28.
¹⁵⁶ Ibid, s 23, List C, paras 23 and 17.
¹⁵⁷ Inland Revenue Press Release, 30 November 1993, (1993) Simon’s Tax Intelligence 1539.
¹⁵⁸ CAA 2001, s 21(3).
¹⁵⁹ Ibid, s 23 List C, para 2.
¹⁶⁰ Ibid, s 23(4).
¹⁶¹ On which, see Family Golf Centres Ltd v Thorne [1998] STC (SCD) 106.
¹⁶² See Inland Revenue Press Release, 9 March 1994, (1994) Simon’s Tax Intelligence 339.
¹⁶³ CAA 2001, s 24; rule added to CAA 1990 by FA 1994, s 117; the definition of ‘land’ in the Interpretation Act 1978 is modified, CAA 2001, s 24(2).
¹⁶⁴ Jarrold v John Good & Sons Ltd [1963] 1 All ER 141, 40 TC 681, 696, per Pearson LJ.
¹⁶⁵ See Sir Donald Nicholls V-C in Carr v Sayer [1992] STC 396, 402, 65 TC 15, 22.
¹⁶⁶ Jarrold v John Good & Sons Ltd [1963] 1 All ER 141, 40 TC 681. The decision of the Commissioners was left intact.
¹⁶⁷ Wimpy International Ltd v Warland [1989] STC 273, 279e, 61 TC 51, 96, CA, per Fox LJ.
¹⁶⁸ [1982] STC 307 HL; [1981] STC 671, 55 TC 188, CA.
¹⁶⁹ See [1982] STC 307, 312–13, per Lord Hailsham, 314f, per Lord Wilberforce, and 316a, per Edmund Davies
¹⁷⁰ [1997] STC 1167, CA.
¹⁷¹ [1969] 1 All ER 732, 45 TC 221.
¹⁷² Ibid, 740, 239.
¹⁷³ CAA 2001, s 25.
¹⁷⁴ Wimpy International v Warland [1988] STC 149, 171b, 61 TC 51, 82d, per Hoffmann J 1990, s 60.
¹⁷⁵ [1989] STC 273, 279, 61 TC 51, 96, CA.
¹⁷⁶ [1995] STC 706, 711b, 67 TC 401, 413. For a general Revenue view on glasshouses, see Inland Revenue interpretation RI 33, updated by RI 185.
¹⁷⁷ Imperial Chemical Industries of Australia and New Zealand v Taxation Commr of the Commonwealth of Australia (1970) 120 CLR 396.
¹⁷⁸ In Cole Brothers v Phillips [1982] STC 307, HL; [1981] STC 671, 55 TC 188, CA, the Revenue agreed that wiring to certain items such as alarms and clocks was plant, but said that (a) transformers, switchgear and the main switchboard and (b) specially designed lighting fittings, were not plant. The Commissioners held that the transformers were plant, but not the other items under (a) or any of (b). The Court of Appeal held that the switchboard was plant because of the fact that some of the wiring had been agreed to be plant. The House of Lords agreed with the Court of Appeal in treating the remaining items as matters for the Commissioner’s decision as matters of fact.
¹⁷⁹ Cole Bros Ltd v Phillips [1982] STC 307, 55 TC 188, HL; Hunt v Henry Quick Ltd [1992] STC 633, 65 TC 108; IRC v Scottish and Newcastle Breweries Ltd [1982] STC 296, 55 TC 252 (note that the light fitting was allowed in Wimpy International Ltd v Warland [1988] STC 149, 176, 61 TC 51, 88). On the 1982 House of Lords’ decisions, see [1983] BTR 54.
¹⁸⁰ The Revenue relies strongly on J Lyons & Co Ltd v A-G [1944] ch 281, [1944] 1 All ER 477.
¹⁸¹ St John’s School v Ward [1975] STC 7, 49 TC 524 (note the astonishingly harsh refusal by Templeman J to allow an apportionment between the building and the equipment).
¹⁸² Dixon v Fitch’s Garage Ltd [1975] STC 480, [1975] 3 All ER 455, 50 TC 509.
¹⁸³ Cole Bros Ltd v Phillips [1982] STC 307, 311, 55 TC, 223, per Lord Hailsham; but see the pointed comment of Walton J in Thomas v Reynolds [1987] STC 135, 140, 59 TC 502, 508.
¹⁸⁴ Thomas v Reynolds [1987] STC 135, 59 TC 502.
¹⁸⁵ Benson v Yard Arm Club Ltd. [1979] STC 266, [1979] 2 All ER 336, 53 TC 607.
¹⁸⁶ Carr v Sayer [1992] STC 396, 65 TC 15.
¹⁸⁷ Family Golf Centres Ltd v Thorne [1998] STC (SCD) 106.
¹⁸⁸ Attwood v Anduff Car Wash Ltd [1997] STC 1167, CA.
¹⁸⁹ Schofield v R. and H. Hall Ltd [1975] STC 353, 49 TC 538.
¹⁹⁰ Cooke v Beach Station Caravans Ltd [1974] STC 402, [1974] 3 All ER 159, 49 TC 514.
¹⁹¹ Leeds Permanent Building Society v Procter [1982] STC 821, 56 TC 293.
¹⁹² Hunt v Henry Quick Ltd [1992] STC 633, 643–4, 65 TC 108, 124 (note the doubts of Vinelott J).
¹⁹³ [1982] STC 296, 55 TC 252, HL.
¹⁹⁴ For example the windows in Leeds Permanent Building Society v Procter [1982] STC 821.
¹⁹⁵ CAA 1990, s 22(2); for history and avoiding hybrid Bill status, see Lawson, Memoirs, 354. It was not possible to claim both the first year allowance and the writing down allowance for the same period, which is why the allowance is called a first year allowance rather than an initial allowance.
¹⁹⁶ FA 2000, s 70. For the 1997–1998 period the rate was 50%, but 12% for long life assets; from 1 November 1992 to 31 October 1993 the rate was 40% and applied to most assets and all sizes of business (CAA 1990, s 22(3B)).
¹⁹⁷ Ibid, s 52(1)(2).
¹⁹⁸ Ibid, s 53.
¹⁹⁹ CAA 2001, s 52(5).
²⁰⁰ CAA 2001, s 46.
²⁰¹ Ibid, exclusion 8, which is itself subject to s 161.
²⁰² Ibid, s 46(2) exclusion 1.
²⁰³ Ibid, ss 40 and 41.
²⁰⁴ Ibid, s 43.
²⁰⁵ See Ibid, s 39 and 45D as amended by FA 2002, s 59.
²⁰⁶ Ibid, s 39 and 45E as amended by FA 2002, s 61.
²⁰⁷ Ibid, ss 47 and 48.
²⁰⁸ Ibid, s 49.
²⁰⁹ Ibid, s 45, original version added by FA 2000, s 71 for expenditure on or after 28 July 2000.
²¹⁰ Ibid, s 45(2).
²¹¹ Ibid, s 45(3).
²¹² CAA 2001, ss 39 and 52(3) amended by FA 2001, sch 17 and adding ss 45A–45C; on timing of expenditure see sch 17, para 6.
²¹³ CAA 2001, s 45A(3) and SI 2000/2541; see also Revenue Briefing Note BN 10 7 March 2001.
²¹⁴ CAA 2001, ss 45B and 45C.
²¹⁵ CAA 2001, s 46 as amended by FA 2001, sch 17.
²¹⁶ Various provisions added to CAA 2001, by FA 2001, sch 18.
²¹⁷ CAA 2001, s 172(3) as amended by FA 2001, sch 18; for definitions see CAA 2001, ss 175A and 180A.
²¹⁸ Ibid, s 56(2).
²¹⁹ Ibid, s 54.
²²⁰ Ibid, s 54(6).
²²¹ Ibid, s 74.
²²² Ibid, s 86.
²²³ Ibid, s 127.
²²⁴ Ibid, s 206.
²²⁵ Ibid, ss 211 and 538.
²²⁶ Ibid, ss 54(4), (5) referring to s 101.
²²⁷ Ibid, ss 54(4), (5) referring to s 107.
²²⁸ CAA 1990, s 61(1) not needed as part of CAA 2001, and so not re-enacted.
²²⁹ CAA 2001, s 15(1), 19 and 258–261.
²³⁰ Ibid, s 86, below Ñ24A.3.8.
²³¹ This is what marks a ‘first year’ allowance off from an ‘initial’ allowance.
²³² Ibid, ss 55(4), (5) and 65.
²³³ Ibid, s 208.
²³⁴ Defined in CAA 2001, s 61(1) (see above at Ñ24A.2.4). See also s 66 helpfully listing provisions about disposal values in other parts of the Act.
²³⁵ See ibid, s 61(2) and, in relation to computer software, ss 72, 281A, s 55(4).
²³⁶ On hire purchase note CAA 2001, s 67(4).
²³⁷ On assets used partly for qualifying activity see Ibid, ss 11(4) and 205–207.
²³⁸ Ibid, s 60.
²³⁹ For general rules, see ibid, ss 55–56.
²⁴⁰ Ibid, s 55(4) and (5).
²⁴¹ Ibid, s 61(2).
²⁴² Ibid, s 62(2) and (3).
²⁴³ Ibid.
²⁴⁴ See IRC v West (1950) 31 TC 402.
²⁴⁵ CAA 2001, s 61(2) and (4)(a).
²⁴⁶ Ibid, s 61(2) and (4)(b).
²⁴⁷ Ibid, s 61(2), items 3 and 4.
²⁴⁸ Ibid, s 61(2), item 6.
²⁴⁹ Ibid, s 266.
²⁵⁰ Ibid, ss 266 and 267. The provisions overridden are ss 104 (long life assets), 108 (overseas leasing pool) and 265 (normal succession rule).
²⁵¹ Ibid, s 266(1)(c).
²⁵² Ibid, s 266(1)(b); see FA 2001, sch 21, para 4 amending CAA 2001, s 266.
²⁵³ Ibid, s 574.
²⁵⁴ Ibid, s 265; on succession on death, n s 268(5)–(7), added by FA 1990.
²⁵⁵ Ibid, ss 562—on procedure, see s 563.
²⁵⁶ CAA 2001, s 63.
²⁵⁷ Ibid, ss 83–89. On practice, see Statement of Practice SP 1/86.
²⁵⁸ CAA 2001, s 86(1).
²⁵⁹ Ibid, s 85(1)–(4).
²⁶⁰ The list is in Ibid, s 84.
²⁶¹ Tax Bulletin (November 1993).
²⁶² Ibid, ss 87–89.
²⁶³ CAA 2001, ss 90–104; on definition, see s 91, added by FA 1997; on problems of definition, see Gammie [1997] BTR 241. The 6% limit is applied by s 102.
²⁶⁴ Ibid, ss 93–96, added by FA 1997.
²⁶⁵ Ibid, ss 97–100.
²⁶⁶ Ibid, s 92(1).
²⁶⁷ Ibid, s 103.
²⁶⁸ Ibid, s 104.
²⁶⁹ CAA 2001, s 81.
²⁷⁰ Roberts v Granada TV Rental Ltd [1970] 2 All ER 764, 46 TC 295.
²⁷¹ CAA 2001, s 82.
²⁷² A category defined by ibid, s 82(4).
²⁷³ Ibid, s 74(1).
²⁷⁴ Ibid, s 74(2)(c) added by FA 2002, sch 19, para 6.
²⁷⁵ Ibid, s 75.
²⁷⁶ Ibid, ss 76–78.
²⁷⁷ Ibid, s 79 referring to ss 213–233.
²⁷⁸ TA 1988, s 578A; on effect of rebate of hire charge, see ESC B28.
²⁷⁹ TA 1988, s 578B(2) added by FA 1991.312 CAA 2001, s 67(1)–(3). A hirer under such an agreement is very different from a mere lessee; see Inland Revenue Press Release, 27 October 1986, (1986) Simon’s Tax Intelligence 680.
²⁸⁰ Ibid, s 578(2A) added by FA 2002, s 60.
²⁸¹ A hirer under such an agreement is very different from a mere lessee; see Inland Revenue Press Release, 27 October 1986, (1986) Simon’s Tax Intelligence 680.
²⁸² Ibid, s 67(4); on disposal value see s 68.
²⁸³ Inland Revenue interpretation RI 10.
²⁸⁴ CAA 2001, s 69 added by FA 2000, s 80.
²⁸⁵ CAA 2001, sch 3, para 47(5); on the meaning of ‘qualifying purpose’ and ‘requisite period’, see ss 121–125.
²⁸⁶ The effect of an option needs close attention; in practice, the lessee can be given much the same economic benefit by reducing the leasing charge or extending the period of the lease.
²⁸⁷ CAA, ss 15 and 19 and superseding CAA 1990, s 65; s 19 contains rules on the cessation of leasing.
²⁸⁸ CAA 2001, s 258(4).
²⁸⁹ Ibid, s 258.
²⁹⁰ Ibid, s 258(3).
²⁹¹ Ibid, 258(5).
²⁹² Ibid, ss 259 and 260; group relief is excluded by s 260(7). On life assurance companies see s 261.
²⁹³ CAA 2001, s 15(3) referring to s 35.
²⁹⁴ Ibid, sch 3, para 47(5).
²⁹⁵ CAA 2001, s 105.
²⁹⁶ Ibid, s 110.
²⁹⁷ Ibid, s 105(5) and ss 121, 123 and 124.
²⁹⁸ Ibid, s 109.
²⁹⁹ Ibid, ss 109(2)(a) and 106.
³⁰⁰ Ibid, s 110.
³⁰¹ Ibid, s 107.
³⁰² Ibid, s 108.
³⁰³ Ibid, ss 111–120.
³⁰⁴ Ibid, ss 121 and 122.
³⁰⁵ Ibid, ss 123–125.
³⁰⁶ TA 1988, s 384A moved out of the CAA by sch 2, para 30—previously CAA 1990, s 142.
³⁰⁷ Ibid, s 61(4).
³⁰⁸ [1984] STC 204, [1984] 1 All ER 849, CA; CAA 1990, s 61(4)(b) (see above at Ñ24A.3.2).
³⁰⁹ CAA 2001, ss 127–158.
³¹⁰ The Mac (1882) 7 PD 126, CA.
³¹¹ Wells v Gas Float Whitton No 2 (Owners) [1897] AC 337, HL; see also Wirth Ltd v SS Acadia Forest [1974] 2 Lloyd’s Rep 563.
³¹² This limit does not apply if the ship is lost at sea or is irreparably damaged (CAA 2001, s 151).
³¹³ Defined by CAA 1990, s 151–154 33E, added by FA 1995. See Inland Revenue Press Release, 20 July 1994, (1994) Simon’s Tax Intelligence 882.
³¹⁴ Defined by CAA 2001, ss 146–150.
³¹⁵ Ibid, s 147.
³¹⁶ FA 2000, s 82 and sch 22. There is much useful background in Independent Inquiry into a Tonnage Tax, published by H M Treasury on 12 August 1999.
³¹⁷ FA 1982, s 72; for an example of the schemes which had to be stopped see Ensign Tankers (Leasing) Ltd v Stokes [1992] STC 226, 64 TC 617, HL, above Ñ5.6.5.
³¹⁸ F (No 2) A 1992, s 43. See Inland Revenue Press Release, 23 June 1992, (1992) Simon’s Tax Intelligence 638.
³¹⁹ F (No 2) A 1992, ss 43(1) and (2).
³²⁰ F (No 2) A 1992, s 41.
³²¹ F (No 2) A 1992, s 41(5).
³²² Defined ss 40A(4) and 43(1).
³²³ 349 F (No 2) A 1992, s 42.
³²⁴ F (No 2 ) A 1992, s 42(8).
³²⁵ FA 1997, s 48.
³²⁶ F (No 2) A 1997, s 48 as amended by FA 2001, s 72.
³²⁷ F (No 2) A 1992, s 40A, previously CAA 1990, s 68.
³²⁸ F No 2 A 1992, s 40A(1) and 40D.
³²⁹ Ibid, s 40A(5).
³³⁰ Ibid, s 40B.
³³¹ Ibid, 40D(2)(c).
³³² FA 2002, s 99.
³³³ Ibid, ss 213–230.
³³⁴ Ibid, s 213.
³³⁵ Ibid, ss 214–216. On predecessor of s 215, see Barclays Mercantile Industrial Finance Ltd v Melluish [1990] STC 314, 63 TC 95.
³³⁶ Ibid, s 217.
³³⁷ Ibid, s 218.
³³⁸ Ibid, ss 219–220.
³³⁹ Ibid, ss 221 et seq; however see FA 2001, sch 21, para 3, amending CAA 2001, s 221(b)(iii) to its intended original scope.
³⁴⁰ Ibid, ss 219 and 220.
³⁴¹ Ibid, s 220(3).
³⁴² Ibid, ss 227 and 228.
³⁴³ Ibid, s 229.
³⁴⁴ Ibid, s 230.
³⁴⁵ CAA 2001, ss 305–308.
³⁴⁶ Ibid, s 305.
³⁴⁷ Ibid, s 305(4) and see Statement of Practice SP 4/80 (separate lettings of workshops for small businesses).
³⁴⁸ Ibid, s 309.
³⁴⁹ Ibid, s 271–272; a private road built on industrial estate may qualify s 284.
³⁵⁰ Ibid, s 273. ‘Cutting’ received a narrow construction in McIntosh v Manchester Corpn [1952] 2 All ER 444, 33 TC 428.
³⁵¹ CAA 1990, s 272(2).
³⁵² Ibid, s 281.
³⁵³ CAA 2001, s 274.
³⁵⁴ Bourne v Norwich Crematorium Ltd [1967] 2 All ER 576, 44 TC 164; it is a nice question whether this expenditure would seem now to qualify as plant in the light of IRC v Barclay, Curle & Co Ltd [1969] 1 All ER 732, 45 TC 221 (see above at Ñ24A.3.4).
³⁵⁵ [1980] STC 166, 53 TC 292.
³⁵⁶ [1998] STC 182, CA. It is unclear whether the Court of Appeal thought that the assets were ‘subjected to a process’; Nourse LJ expressed no opinion.
³⁵⁷ [1998] STC 357; see Salter [1999] BTR 189; see also Revenue Bulletin December 1999 and Tiley and Collison Ñ8.13.
³⁵⁸ CAA 2001, s 276(3).
³⁵⁹ See Dale v Johnson Bros (1951) 32 TC 487.
³⁶⁰ Copol Clothing Co Ltd v Hindmarch [1984] STC 33, [1984] 1 WLR 411, CA; see Marsh [1984] BTR 124; and Carr v Sayer [1992] STC 396 where the provision was confined to facilities needed in the ordinary process of physically transporting goods and so did not extend to quarantine kennels.
³⁶¹ This will be the case even where the stockist does not subject the materials to the industrial process himself; see Crusabridge Investments Ltd v Casings International Ltd (1979) 54 TC 246 (a case concerning an action for breach of a covenant in a lease in which the term ‘industrial building’ was held to cover a warehouse used for the storage of tyres before they were sold for remoulding); and Inland Revenue Press Release, 26 March 1982, (1982) Simon’s Tax Intelligence 145.
³⁶² Bestway Holdings v Luff [1998] STC 357 see also IR Tax Bulletin, December 1999.
³⁶³ Saxone Lilley and Skinner (Holdings) Ltd v IRC [1967] 1 All ER 756, 44 TC 122 (HL).
³⁶⁴ See Bestway Holdings (above).
³⁶⁵ Crusabridge Investments Ltd v Casings International Ltd (1979) 54 TC 246 as explained in Bestway Holdings v Luff [1998] STC 357.
³⁶⁶ Vibroplant Ltd v Holland [1982] STC 164, 54 TC 658. CAA 2001, s 276(3) would not have helped in the Vibroplant case since the trade of plant hire would not qualify under CAA 2001, s 274(1) Table A.
³⁶⁷ CAA 2001, s 274.
³⁶⁸ CAA 2001, s 277.
³⁶⁹ IRC v Lambhill Ironworks Ltd (1950) 31 TC 393 (where the office qualified because of its essentially industrial character).
³⁷⁰ Girobank plc v Clarke [1998] STC 182; see Morgan [1998] BTR 517.
³⁷¹ Sarsfield v Dixons Group plc [1998] STC 938; mysteriously this case does not even discuss the decision of the House of Lords in Saxone Lilley and Skinner (Holdings) Ltd v IRC [1967] 1 All ER 756, 44 TC 122.
³⁷² Kilmarnock Equitable Cooperate Society Ltd v IRC (1966) 42 TC 675; distinguished in the Dixon case. See Hughes [1980] BTR 459.
³⁷³ CAA 2001, s 271, 305, and 310(1)(a); on qualifying expenditure see ibid, ss 280–304; on enterprise zones in general, see Watson, Tolleys Tax Planning 1999–2000, 497.
³⁷⁴ CAA 2001, s 280.
³⁷⁵ See CAA 2001, ss 27, 30–33.
³⁷⁶ Ibid, s 279.
³⁷⁷ Ibid, s 283; this raises nice questions if the building contains machinery which is affixed to the floor.
³⁷⁸ Abbott Laboratories Ltd v Carmody [1968] 2 All ER 879, 44 TC 569.
³⁷⁹ CAA 2001, s 309(1)(b). On the situation where the expense is shared, see ibid, ss 537 and 539.
³⁸⁰ Ibid, s 314.
³⁸¹ Ibid, s 286.
³⁸² Under Ibid, s 353.
³⁸³ Ibid, s 271(b)(i) or come with the extensions listed above and set out in the rest of s 271(b).
³⁸⁴ Ibid, s 342; the rules on highways are gathered together at ss 341–344 but see FA 2001, sch 21, para 6 amending CAA 2001, s 341.
³⁸⁵ Ibid, ss 290, 11. Claims must be made within 2 years of the date the lease takes effect (s 291(4)).
³⁸⁶ Ibid, s 291(3) refers to the rules in TA 1988, s 34 (see below at Ñ25.5.1); CAA 2001, s 359(3) is ignored (s 291(3)).
³⁸⁷ Ibid, s 291(1); there is an exception for bodies exercising statutory functions, ibid, on connected person status see ibid, s 575 referring to TA 1988, s 839.
³⁸⁸ Ibid, ss 291(2), 11(6)(b), TA 1988, s 839. See Barclays Mercantile Industrial Finance Ltd v Melluish [1990] STC 314, 63 TC 95.
³⁸⁹ Ibid, s 359(2)(3).
³⁹⁰ Ibid, s 289.
³⁹¹ Ibid, s 359(4).
³⁹² Ibid, s 359(5).
³⁹³ Ibid, s 305.
³⁹⁴ Ibid, s 278.
³⁹⁵ Ibid, ss 305–308.
³⁹⁶ Ibid, s 298(1); note FA 2001, sch 21, para 5 correcting CAA 2001, s 298(3).
³⁹⁷ Ibid, s 306(1).
³⁹⁸ Ibid, s 281.
³⁹⁹ Ibid, s 302 referring to ss 295 and 296; originally added by F (No 2) A 1992 on which see Inland Revenue Press Release, 16 December 1991, (1992) Simon’s Tax Intelligence 5.
⁴⁰⁰ Ibid, s 303 also added by F (No 2) A 1992.
⁴⁰¹ Ibid, ss 302 and 298(1).
⁴⁰² Ibid, s 298(1) also added by F (No 2) A 1992.
⁴⁰³ Added by FA 1993, s 113.
⁴⁰⁴ CAA 2001, s 309.
⁴⁰⁵ Ibid, s 310.
⁴⁰⁶ Ibid, s 310(1)(a).
⁴⁰⁷ Ibid, s 285.
⁴⁰⁸ Ibid, ss 314 and 315.
⁴⁰⁹ Ibid, s 314(4).
⁴¹⁰ Ibid, s 319.
⁴¹¹ Ibid, s 336.
⁴¹² Ibid, s 315.
⁴¹³ Ibid, s 313, ie written off in accordance with the rules in ss 332–340; on starting cost see s 322.
⁴¹⁴ Defined in ibid, s 316.
⁴¹⁵ Ibid, s 320.
⁴¹⁶ Ibid, ss 358 and 359.
⁴¹⁷ Ibid, s 318.
⁴¹⁸ Ibid, s 321.
⁴¹⁹ Ibid, s 319.
⁴²⁰ Ibid, s 322(3).
⁴²¹ Ibid, s 3(3). On relief when vendor’s expense was on revenue account, see ss 10(4), (5).
⁴²² Thus, if the parties try to avoid a sale within the period by the device of a lease plus an option to buy after the 25-year period has expired, they run the risk of any premium for the lease being treated in part as income.
⁴²³ CAA 2001, s 339.
⁴²⁴ Ibid, ss 569, 570.
⁴²⁵ Ibid, s 357 added by FA 1995, s 100; see Inland Revenue Press Release, 29 November 1994, (1994) Simon’s Tax Intelligence 1482.
⁴²⁶ CAA 2001, ss 279 and 309.
⁴²⁷ Under ibid, s 311 CAA 1990, s 3(3).
⁴²⁸ Ibid, ss 295–297.
⁴²⁹ Ibid, s 279(1); on the requirement to offer breakfast and dinner, see Statement of Practice SP 9/87.
⁴³⁰ Ibid, ss 279(6) and (7).
⁴³¹ Ibid, s 317.
⁴³² Ibid, ss 490–491 and 504. An initial allowance had been phased out by 1986.
⁴³³ Ibid, ss 507–510 (writing down allowance) 513–522 (balancing adjustments).
⁴³⁴ TCGA 1992, s 41(4).
⁴³⁵ Ibid, s 361.‘Relevant interest’ is defined in s 364 and includes an owner in fee simple, a lessee and the Scottish equivalents; allowances for forestry land were abolished for chargeable periods beginning on or after 20 June 1989 (FA 1989, s 120).
⁴³⁶ Ibid, ss 364–368 with further definitions, eg in relation to Scotland, in s 393; the mortgagor holds the relevant interest rather than the mortgagee ibid, s 366.
⁴³⁷ More generous rules applied to expenditure incurred before 1 April 1987 under a contract entered into before 14 March 1984.
⁴³⁸ CAA 1990, s 124A, added by FA 1993, sch 12.
⁴³⁹ CAA 2001, ss 391 and 392.
⁴⁴⁰ Ibid, s 361(1)(b); husbandry is defined in ibid, s 362 to include intensive rearing of livestock or fish.
⁴⁴¹ Ibid, s 124.
⁴⁴² Ibid, s 369(3).
⁴⁴³ Lindsay v IRC (1952) 34 TC 289, 292, per Lord Carmont.
⁴⁴⁴ Ibid.
⁴⁴⁵ (1962) 40 TC 379.
⁴⁴⁶ Ibid, 384, per Lord Clyde.
⁴⁴⁷ Ibid.
⁴⁴⁸ CAA 2001, ss 380 and 381.
⁴⁴⁹ Ibid, s 381; the election also applies to certain accidents (see s 129(1)(b)).
⁴⁵⁰ CAA 2001, s 573.
⁴⁵¹ Ibid, s 389.
⁴⁵² Ibid, ss 393A(2), 393F and 393G.
⁴⁵³ CAA 2001, ss 393H and 393J.
⁴⁵⁴ Ibid, ss 393M–393P.
⁴⁵⁵ Ibid, s 393T.
⁴⁵⁶ Ibid, s 393B.
⁴⁵⁷ Ibid, s 393C.
⁴⁵⁸ Ibid, ss 393D and 393E.
⁴⁵⁹ On transition see CAA 1990, s119.
⁴⁶⁰ CAA 2001, s 394.
⁴⁶¹ CAA 2001, s 395.
⁴⁶² Ibid, s 399.
⁴⁶³ Ibid, s 396(2).
⁴⁶⁴ CAA 2001, s 414(2).
⁴⁶⁵ Ibid, s 402; otherwise the Plant and Machinery rules apply (s 399(1)).
⁴⁶⁶ Ibid, s 401.
⁴⁶⁷ Ibid, s 415; where the building is in the UK the industrial buildings allowance may apply (eg s 277(2)(3)).
⁴⁶⁸ Ibid, s 416 (but only if the work is carried out within 3 years of the termination; the cost is treated as incurred when the trade ends).
⁴⁶⁹ Ibid, s 418.
⁴⁷⁰ Ibid, s 432.
⁴⁷¹ Ibid, s 404 ; a similar valuation is used for calculating the disposal proceeds (s 400(2)).
⁴⁷² Ibid, ss 407–413.
⁴⁷³ FA 2002, sch 21, paras 8–13 inter alia adding CAA 2002, ss 416A–416E;
⁴⁷⁴ FA 2000, sch 21, para 3(2); Appeal on whether now lie within the ordinary tax appeal structure and not as previously the Secretary of State for Trade and Industry; CAA 1990, s 82A as added by FA 2000, sch 19.
⁴⁷⁵ CAA 2001, ss 437 and 439. On ‘relating to’, see Salt v Young [1999] STC (SCD) 213 where the Special Commissioner said that one should not trace causality back too far. T’s trade was in publishing books but that did not mean that expenditure on a computer used in carrying out research in writing the book was deductible under this head. On meaning of research and development see TA 1988 s 837A (referred to by CAA 2001, s 437(2)).
⁴⁷⁶ CAA 2001, s 439(1); Gaspet Ltd v Elliss [1985] STC 572.
⁴⁷⁷ TA 1988, s 837A(2)–(5); this brings in SSAP 13.
⁴⁷⁸ CAA 2001, s 438(2).
⁴⁷⁹ CAA 2001, ss 438 and 440.
⁴⁸⁰ CAA 2001, s 439(4).
⁴⁸¹ Ibid, s 443.
⁴⁸² Ibid, s 450.
⁴⁸³ Ibid, s 441(2).
⁴⁸⁴ Ibid, ss 442–443; on timing see s 444 and on costs of demolition s 445.
⁴⁸⁵ Under TA 1988, s 82B replacing CAA 1990, s 136.
⁴⁸⁶ CAA 2001, s 452.
⁴⁸⁷ Ibid, s 454.
⁴⁸⁸ Ibid, 455 also referring to TA 1988, s 531(2).
⁴⁸⁹ Ibid, ss 456–463.
⁴⁹⁰ Ibid, ss 400D, 458(1).
⁴⁹¹ Ibid, ss 464–466.
⁴⁹² Ss 467–469.
⁴⁹³ Ibid, s 470.
⁴⁹⁴ Ibid, ss 473–475.
⁴⁹⁵ Ibid, ss 471–472.
⁴⁹⁶ Ibid, s 474.
⁴⁹⁷ Ibid, s 476.
⁴⁹⁸ Defined ibid, s 483.
⁴⁹⁹ Ibid, ss 479 and 480.
⁵⁰⁰ Ibid, s 481.
⁵⁰¹ TA 1988, s 524.
⁵⁰² TA 1988, s 525.
⁵⁰³ TA 1988, s 528.
⁵⁰⁴ CAA 2001, s 484, undoing Dumbarton Harbour Board v Cox (1918) 7 TC 147.
⁵⁰⁵ Ibid, s 484(3).
⁵⁰⁶ Ibid, s 487.
⁵⁰⁷ Ibid, s 488.
⁵⁰⁸ The idea of rent is associated particularly with the great economist Ricardo, see his collected works (ed) Saffra, CUP. A rent resource tax for oil and gas is discussed by Garnaut and Ross 85, Economic Journal 272; on North Sea Oil taxation see Devereux and Morris IFS Report Series No 6 (1983).
⁵⁰⁹ See Mintz (1996) 16(3) Fiscal Studies 23, 46–9.
⁵¹⁰ For example Ford and Poret, OECD Economic Studies No 16; cited in The Economist, 14 May 1991.
⁵¹¹ See Corporation Tax, Cmnd 8456, ch 15. For comparative material, see OECD Taxing Profits in a Global Economy, ch 3, Tables 3.5, 3.9–3.12.
⁵¹² See Prest and Barr, Public Finance in Theory and Practice, 16.4 and Hendershott and Cheng, How Taxes Affect Economic Behaviour (Brookings, 1981), 85, both stressing other factors affecting investment decisions such as interest rates and inflation. See also the review of older literature by Sumner, IFS Lecture Series (No 4) (1976).
⁵¹³ Accountancy depreciation can consider the individual asset; a tax system must accommodate many kinds of assets in one rate, unless it opts for free depreciation.
⁵¹⁴ On effects, see Bond, Denney and Devereux (1993) 14(2) Fiscal Studies 1. Other alleviating rules, eg extending relief for corporate losses, were introduced at the same time by FA 1992.
⁵¹⁵ Allowances are also given in the form of relief for interest payments. Grants were introduced between 1966 and 1970; see, inter alia, Lazar [1966] BTR 179, Cmnd 4516, Ñ2; and, in a wider context, Sharpe 95 LQR 206. On discretionary element, see British Oxygen Co Ltd v Minister of Technology [1971] AC 610, [1970] 3 All ER 165.
⁵¹⁶ Devereux (1988) 9(1) Fiscal Studies 62.
⁵¹⁷ Feldstein and Summers (1979) National Tax Jo 4.
⁵¹⁸ See ideas discussed in Corporation Tax, above at n 505, chs 11, 15.
⁵¹⁹ For a comparison of accelerated depreciation with inflation adjustments, see Feldstein (1981) 34 National Tax Jo 29.
⁵²⁰ See Tucker Report , Cmd 8189 (1951), ÑÑ102–115; Royal Commission on the Taxation of Profits and Income, Final Report, Cmnd 9474 (1955), ÑÑ350–62 and Morley, Fiscal Implications of Inflation Accounting, ch 1.
⁵²¹ In 1915 excess profits duty was applied to trades but not to professions. McKenna, the Chancellor of the Exchequer, justified this on the ground that it would be impossible to devise a satisfactory datum line in the case of members of a profession who made their profits by the excessive expenditure of their capital, that is their energy, brain power and health.
⁵²² On human capital, see Beer [1987] BTR 392; and other articles cited above at Ñ7.1.
⁵²³ See discussions by Lindholm (1951) 4 National Tax Jo 180;Wiseman (1963) 16 National Tax Jo 36; and Bird (1963) 16 National Tax Jo 41.

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