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Part 1 Introduction

Chapter 1 Capital allowances: general

C2C3C4C54 Capital expenditure

1

In this Act “capital expenditure” and “capital sums” are used in the sense given in this section.

2

“Capital expenditure” and “capital sums” do not include, in relation to a person incurring the expenditure or paying the sums—

a

any expenditure or sum that may be deducted in calculating the profits or gains of a trade, profession or vocation or property business carried on by the person, or

F2b

any expenditure or sum that may be allowed as a deduction under a relevant provision from the taxable earnings from an employment or office held by the person.

F12A

In subsection (2)—

“relevant provision” means any of the following—

a

section 262;

b

section 232 of ITEPA 2003 (giving effect to mileage allowance relief);

c

Chapters 2 to 6 of Part 5 of that Act (general deductions allowed from earnings); and

F4d

sections 188 to 194of FA 2004 (contributions under registered pension schemes), and

“taxable earnings” has the meaning given by section 10 of ITEPA 2003.

3

“Capital expenditure” and “capital sums” do not include, in relation to a recipient of the expenditure or sums—

a

any amounts that are to be added in calculating the profits or gains of a trade, profession or vocation or property business carried on by the recipient, or

b

any amounts that are F3earnings of an employment or office held by the recipient.

4

“Capital expenditure” and “capital sums” do not include, in relation to—

a

a person incurring the expenditure or paying the sums, or

b

a recipient of the expenditure or sums,

any expenditure or sum in the case of which a deduction of income tax falls or may fall to be made under F6Chapter 6 of Part 15 of ITA 2007 (deduction from annual payments or patent royalties) or under section 906 of that Act (certain royalties etc where usual place of abode of owner is abroad).

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