Commentary on Sections Schedule 2: Consequential amendments Paragraph 64
2038.Paragraph 10B(2A) of Schedule 19AC to ICTA modifies section 440 of ICTA by inserting a subsection (4AA). This paragraph substitutes a new text of that subsection (4AA) to take account of the way section 81 of CAA 1990 is rewritten in this Act.
2039.Prior to this substitution subsection (4AA) referred to sections 81 and 83 of CAA 1990:
“(4AA)Section 81 of the 1990 Act (as it has effect by virtue of section 83(2A) of that Act) shall apply in relation to any case in which an asset or part of an asset held by an overseas life insurance company-(a)ceases to be within the category set out in paragraph (h) of subsection (4) above; and(b)at the same time comes within another of the categories set out in that subsection.”
2040.The text substituted by this paragraph differs in two respects.
2041.First, it omits the words in parentheses which refer to section 83(2A) of CAA 1990. Section 83(2A), in summary, confirmed that capital allowances are restricted to the part of the trade or other activity that is taxable in the UK. It was inserted by FA 2000. The reference in paragraph 10B(2A) of Schedule 19AC (which was also inserted by FA 2000) was then a useful reminder of its effect. In this Act the effect of section 83(2A) of CAA 1990 is preserved. And it applies to all chargeable periods to which this Act applies. There is then no need to remind readers of the point.
2042.Second, the substituted text refers only to section 13 (use for qualifying activity of plant or machinery provided for other purposes). In contrast, the reference in subsection (4AA) provides for section 81 to apply. That includes, in principle, cases falling within section 81(1)(b) of CAA 1990 – see section 14 (use for qualifying activity of plant or machinery which is a gift). This is however of no effect in the context of subsection (4AA).