TTM17546 - Schedule 22 Finance Act 2000: Part X the ring fence - capital allowances - ship leasing - Para 94 quantitative restrictions on allowances

FA00/SCH22/PARA94

(1) Where the lessor under the lease is entitled to capital allowances in respect of expenditure on the provision of the ship, the following provisions apply.

(2) There is no entitlement to any annual investment allowance or first year allowance.

(3) The lessor is entitled-

(a) in respect of the first £40 million of the cost of providing the ship, to writing-down allowances at the rate determined under sub-paragraph (3A) on the reducing balance, and

(b) in respect of the next £40 million, to writing-down allowances at the rate specified in section 104D(1) of the Capital Allowances Act 2001 on the reducing balance.

(3A) The rate mentioned in sub-paragraph (3)(a) is—

(a)     if the rate of the writing down allowance to which the lessor would be entitled in respect of the expenditure apart from this paragraph is that specified in       section 56(1) of the Capital Allowances Act 2001, that rate, and

(b)     otherwise, the rate specified in section 104D(1) of that Act.]⁵

 

 (4) The expenditure shall be allocated to separate pools in accordance with sub-paragraph (4A) and dealt with under Part 2 of the Capital Allowances Act 2001 in the same way as expenditure allocated to a class pool.

(4A)

 (5) If the cost of providing the ship exceeds £80 million, the lessor is not entitled to capital allowances in respect of the excess.

History

Amended by Schedule 2 CAA 2001. Up to 31^st March 2001 subparagraph 4 read:

(4) The expenditure within each of those bands shall be allocated to separate pools and dealt with under Part II of the Capital Allowances Act 1990 in the same way as expenditure allocated to a class pool.

These pools are referred to below as “the 25%; pool” and “the 10%; pool”.

References

Quantitative restrictions on allowances	TTM10400
Entitlement to allowances	TTM10410