Commentary on Sections Glossary History Section 441: Allowances
1541.This section is based on sections 137(1) and (5) and 138(2) of CAA 1990.
1542.This section uses the term “allowances” instead of “deduction in taxing a trade” which is found in CAA 1990. See Note 55 in Annex 2 for more detail.
1543.CAA 1990 essentially gives an allowance of 100% of qualifying expenditure and a charge (capped at the allowance given) of all of the disposal value relating to that qualifying expenditure. This section takes a different approach.
1544.Subsection (1) gives an allowance in the relevant chargeable period. The allowance equals the excess of qualifying expenditure over any disposal value taken into account for that relevant chargeable period (instead of an allowance equal to that qualifying expenditure and a charge on that disposal value). See Change 39 in Annex 1.
1545.Subsection (2) defines “relevant chargeable period”, a term used in subsection (1). There are minor differences between the formulation used in subsection (2)(b) and that used in section 137(5) of CAA 1990 which looks at whether the expenditure was incurred “before the setting up and commencement of the trade” rather than before the chargeable period in which the trade is set up and commenced. See Note 56 in Annex 2.
1546.Subsection (3) permits a claim of less than the full amount of an allowance to be made by the person. See Change 38 in Annex 1.