Commentary on Sections Overview Chapter 2: Reliefs for expenditure on contaminated land Section 1147: Deduction for capital expenditure
2946.This section gives the company a deduction for capital expenditure included in qualifying land remediation expenditure subject to certain conditions. It is based on paragraph 1 of Schedule 22 to FA 2001.
2947.The company must elect to make the deduction. The procedure for making the election is in section 1148.
2948.Capital expenditure is not defined. It is expenditure for which a deduction would normally be denied by section 53. But this section permits a deduction for capital expenditure in calculating the profits of a trade or UK property business of a company in spite of the rule in section 53.
2949.The existence of section 53 means it is not necessary to rewrite paragraph 1(4)(a) of Schedule 22 to FA 2001. That provision denies relief for expenditure that has already been allowed as a deduction in calculating the profits of a trade or of a UK property business carried on by the company. It is not needed if there is already a specific rule preventing a deduction for such expenditure.
2950.Subsection (7) is a similar provision to section 61. It treats capital expenditure incurred on contaminated land that will be used for the purposes of a trade or UK property business as incurred on the day the trade or business starts. Unlike section 61 there is no time limit on how far in advance of the trade or business starting the expenditure must be incurred.