Capital Allowances Act 2001

61 Disposal events and disposal valuesU.K.

(1)A person who has incurred qualifying expenditure is required to bring the disposal value of the plant or machinery into account for the chargeable period in which—

(a)the person ceases to own the plant or machinery;

(b)the person loses possession of the plant or machinery in circumstances where it is reasonable to assume that the loss is permanent;

(c)the plant or machinery has been in use for mineral exploration and access and the person abandons it at the site where it was in use for that purpose;

(d)the plant or machinery ceases to exist as such (as a result of destruction, dismantling or otherwise);

(e)the plant or machinery begins to be used wholly or partly for purposes other than those of the qualifying activity;

[F1(ee)the plant or machinery begins to be leased under a long funding lease (see Chapter 6A);]

(f)the qualifying activity is permanently discontinued.

(2)The disposal value to be brought into account depends on the disposal event, as shown in the Table—

(3)The amounts referred to in column 2 of the Table are those received by the person required to bring the disposal value into account.

(4)The condition referred to in item 2 of the Table is met by the buyer if—

(a)the buyer’s expenditure on the acquisition of the plant or machinery cannot be qualifying expenditure under this Part or Part 6 (research and development allowances), or

(b)the buyer is a dual resident investing company which is connected with the seller.

[F10(4A)The condition referred to in paragraph (b) of item 2A in the Table is met by the seller if—

(a)the seller is—

(i)a company, or

(ii)a partnership whose partners include one or more companies, and

(b)before the sale the plant or machinery is used wholly or partly for the purposes of a qualifying activity that is not an NI rate activity.

(4B)The condition referred to in paragraph (c) of item 2A in the Table is met by the buyer if—

(a)the buyer is [F11an SME (Northern Ireland employer) company], a NIRE company or a Northern Ireland firm in the chargeable period of the buyer in which the plant or machinery is bought,

(b)the buyer's expenditure on the acquisition of the plant or machinery is qualifying expenditure under this Part or Part 6 (research and development allowances), and

(c)the plant or machinery is used by the buyer wholly or partly for the purposes of an NI rate activity.]

(5)In this section “mineral exploration and access” has the same meaning as in Chapter 13 (provisions affecting the mining and oil industries) and Part 5 (mineral extraction allowances).

[F12(5A)In item 5A of the Table “qualifying lease payments” means the minimum payments under the lease (including any initial payment), excluding the following—

(a)so much of any payment as, under generally accepted accounting practice, falls (or would fall) to be treated as the gross return on investment in respect of the lease,

(b)so much of any payment as represents charges for services, and

(c)so much of any payment as represents qualifying UK or foreign tax (within the meaning of section 70YE) to be paid by the lessor.]

F13(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F13(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F13(8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F13(9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .