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Finance Bill
Schedule 30 — First-year allowances for expenditure on environmentally beneficial plant or machinery

    359

 

                      (b)                     where section 10A applies, to the tapered section 86(1)(e)

amount as defined in section 86A(7A).”.

Minor and consequential amendments

  6       (1)      In paragraph 10(1) for “of the transferor settlement, or of any transferee

settlement,” substitute “of any relevant settlement”.

5

          (2)      In paragraph 12—

              (a)             in sub-paragraph (1)(a) for “arising under Schedule 4B” substitute

“included in a settlement’s Schedule 4C pool”,

              (b)             in sub-paragraph (2) for “the Schedule 4B trust gains” substitute “the

settlement’s Schedule 4C gains”, and

10

              (c)             in sub-paragraph (3) for “the transferor or transferee settlements”

substitute “any relevant settlement”.

          (3)      In paragraph 13(5)(a) for “that in which the transfer of value was made”

substitute “the year of the gain (determined in accordance with paragraph

8B(3))”.

15

          (4)      After paragraph 13 insert—

“Effect of settlement ceasing to exist after transfer of value

          13A                                   Where a settlement ceases to exist after the trustees have made a

transfer of value to which Schedule 4B applies, this Schedule has

effect as if a year of assessment had ended immediately before the

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settlement ceased to exist.”.

Schedule 30

Section 166

 

First-year allowances for expenditure on environmentally beneficial plant

or machinery

Introductory

25

  1        The Capital Allowances Act 2001 (c. 2) is amended as follows.

Types of expenditure for which first-year allowances available

  2        In section 39—

              (a)             after “under” insert “any of the following provisions”;

              (b)             at the end of the entry relating to section 45E, omit “or”;

30

              (c)             after the entry relating to section 45F add—

 

“section 45H

expenditure on environmentally beneficial

 
  

plant or machinery.”.

 
 

 

Finance Bill
Schedule 30 — First-year allowances for expenditure on environmentally beneficial plant or machinery

    360

 

First-year qualifying expenditure on environmentally beneficial plant or machinery

  3        After section 45G insert—

       “45H   Expenditure on environmentally beneficial plant or machinery

              (1)             Expenditure is first-year qualifying expenditure if—

                    (a)                   it is expenditure on environmentally beneficial plant or

5

machinery that is unused and not second-hand,

                    (b)                   it is incurred on or after 1st April 2003,

                    (c)                   it is not long-life asset expenditure, and

                    (d)                   it is not excluded by section 46 (general exclusions).

              (2)             Environmentally beneficial plant or machinery means plant or

10

machinery in relation to which the following conditions are met—

                    (a)                   when the expenditure is incurred, or

                    (b)                   when the contract for the provision of the plant or machinery

is entered into.

              (3)             The conditions are that the plant or machinery—

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                    (a)                   is of a description specified by Treasury order, and

                    (b)                   meets the environmental criteria specified by Treasury order

for plant or machinery of that description.

              (4)             The Treasury may make such orders under subsection (3) as appear

to them appropriate to promote the use of technologies, or products,

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designed to remedy or prevent damage to the physical environment

or natural resources.

              (5)             Any such order may make provision by reference to any technology

list, or product list, issued by the Secretary of State (whether before

or after the coming into force of this section).

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       45I    Certification of environmentally beneficial plant and machinery

              (1)             The Treasury may by order provide that, in such cases as may be

specified in the order, no section 45H allowance may be made unless

a relevant certificate of environmental benefit is in force.

                              A “section 45H allowance” means a first-year allowance in respect of

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expenditure that is first-year qualifying expenditure under section

45H.

              (2)             A certificate of environmental benefit is one certifying that—

                    (a)                   particular plant or machinery, or

                    (b)                   plant or machinery constructed to a particular design,

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                              meets the environmental criteria specified in relation to that

description of plant or machinery by order under section 45H.

              (3)             A relevant certification of environmental benefit means one issued—

                    (a)                   by the Secretary of State or a person authorised by the

Secretary of State;

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                    (b)                   in the case of plant or machinery used or for use in Scotland,

by the Scottish Ministers or a person authorised by them;

                    (c)                   in the case of plant or machinery used or for use in Wales, by

the National Assembly for Wales or a person authorised by it;

 

 

Finance Bill
Schedule 30 — First-year allowances for expenditure on environmentally beneficial plant or machinery

    361

 

                    (d)                   in the case of plant or machinery used or for use in Northern

Ireland, by the Department of Enterprise, Trade and

Investment in Northern Ireland or a person authorised by it.

              (4)             If a certification of environmental benefit is revoked—

                    (a)                   the certificate is treated for the purposes of this section as if it

5

had never been issued, and

                    (b)                   all such assessments and adjustments shall be made as are

necessary as a result of the revocation.

              (5)             If a person who has made a tax return becomes aware that, as a result

of the revocation of a certificate of environmental benefit after the

10

return was made, the return has become incorrect, he must give

notice to the Inland Revenue specifying how the return needs to be

amended.

              (6)             The notice must be given within three months beginning with the

day on which the person first became aware that anything in the tax

15

return had become incorrect because of the revocation of the

certificate.

       45J     Environmentally beneficial components of plant or machinery

              (1)             This section applies for the purpose of apportioning expenditure

incurred on plant or machinery where one or more of the

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components of the plant or machinery (but not all of it) is of a

description specified by Treasury order under section 45H(3).

              (2)             If—

                    (a)                   only one of the components is of such a description, and

                    (b)                   an amount is specified by the order in respect of that

25

component,

                              the part of the expenditure that is section 45H expenditure must not

exceed that amount.

              (3)             If—

                    (a)                   more than one of the components is of such a description, and

30

                    (b)                   an amount is specified by the order in respect of each of those

components,

                              the part of the expenditure that is section 45H expenditure must not

exceed the total of those amounts.

              (4)             If the expenditure is treated under this Act as incurred in

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instalments, the proportion of each instalment that is section 45H

expenditure is the same as the proportion of the whole expenditure

that is section 45H expenditure.

              (5)             Where this section applies, the expenditure is not apportioned under

section 562(3) (apportionment where property sold with other

40

property).

              (6)             In this section “section 45H expenditure” means expenditure that is

first-year qualifying expenditure under section 45H.”.

 

 

Finance Bill
Schedule 30 — First-year allowances for expenditure on environmentally beneficial plant or machinery

    362

 

General exclusions affecting first-year qualifying expenditure

  4       (1)      In section 46(1)—

              (a)             after “under” insert “any of the following provisions”;

              (b)             at the end of the entry relating to section 45E, omit “or”;

              (c)             after the entry relating to section 45F add—

5

 

“section 45H

expenditure on environmentally beneficial

 
  

plant or machinery.”.

 

          (2)               In section 46(5) for “or 45E” substitute “, 45E or 45H”.

Amount of first-year allowances

  5        In section 52(3), in the Table, after the entries relating to expenditure

10

qualifying under section 45F add—

 

“Expenditure qualifying under section 45H

100%”.

 
 

(expenditure on environmentally beneficial

  
 

plant or machinery)

  

Penalty for failure to provide information etc

15

  6        In the second column of the Table in section 98 of the Taxes Management Act

1970 (c. 9) (penalty for failure to provide information etc), in the entry

relating to requirements imposed by the Capital Allowances Act 2001 (c. 2),

after “45G(5) and (6)” insert “, 45I(5) and (6)”.

Transitory provision: expenditure incurred etc before first order made

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  7       (1)      For the purposes of section 45H(2) of the Capital Allowances Act 2001,

where—

              (a)             expenditure on plant or machinery is incurred, or a contract for the

provision of plant or machinery is entered into, before the first order

is made under section 45H(3) of that Act, and

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              (b)             if that order had been made before the relevant time, the conditions

in section 45H(3) of that Act would have been met,

                   those conditions shall be treated as if they were met at the relevant time.

          (2)      In sub-paragraph (1) “the relevant time” means the time when the

expenditure was incurred or (as the case may be) the contract was entered

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into.

 

 

 
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