Introduction Details of the Section
2.Subsections (1)-(3) amend section 538 of Capital Allowances Act 2001, to confirm that it applies to contributions made towards capital expenditure on plant or machinery, and treats the contributor’s capital contribution as capital expenditure on the provision of plant or machinery for use in the contributor’s business.
3.Subsection (4) provides for the amendments to have effect on or after 4 June 2013 in relation to pooling of expenditure (in a computation submitted with a new or amended tax return), and in relation to new capital allowances claims.
4.Subsection (5) provides for the amendments to have always had effect, for the purposes of determining whether a recipient of a contribution can pool expenditure in tax computations, or can make new capital allowances claims.
5.Subsections (6) & (7) provides that there is no change to the legislation applicable to a contributor in relation to any past contribution made in a period for which the contributor has already submitted a tax return (so, for a business making a capital contribution, this section is only relevant to current or future contributions).
6.Subsections (8) – (12) require a recipient of a contribution to bring into account in their capital allowances computations the unrelieved portion of any expenditure pooled in a computation submitted with a new or amended tax return since 1 January 2013, which could not be pooled under the capital allowances rules with the confirmatory amendments as provided for by subsections (1)-(3).