|
| |
|
360D | Meaning of “qualifying business premises” |
| |
(1) | In this Part “qualifying business premises” means any premises in |
| |
respect of which the following requirements are met— |
| |
(a) | the premises must be a qualifying building, |
| |
(b) | the premises must be used, or available and suitable for |
| 5 |
| |
(i) | for the purposes of a trade, profession or vocation, or |
| |
(ii) | as an office or offices (whether or not for the purposes |
| |
of a trade, profession or vocation), |
| |
(c) | the premises must not be used, or available for use as, or as |
| 10 |
| |
(2) | In this section “premises” means any building or structure or part of |
| |
| |
(3) | For the purposes of this Part, if premises are qualifying business |
| |
premises immediately before a period when they are temporarily |
| 15 |
unsuitable for use for the purposes mentioned in subsection (1)(b), |
| |
they are to be treated as being qualifying business premises during |
| |
| |
(4) | The Treasury may by regulations make further provision as to the |
| |
circumstances in which premises are, or are not, qualifying business |
| 20 |
| |
| |
THE RELEVANT INTEREST IN THE QUALIFYING BUILDING |
| |
360E | General rule as to what is the relevant interest |
| |
(1) | The relevant interest in a qualifying building in relation to any |
| 25 |
qualifying expenditure is the interest in the qualifying building to |
| |
which the person who incurred the qualifying expenditure was |
| |
entitled when it was incurred. |
| |
(2) | Subsection (1) is subject to the following provisions of this Chapter |
| |
and to section 360Z3 (provisions applying on termination of lease). |
| 30 |
| |
(a) | the person who incurred the qualifying expenditure was |
| |
entitled to more than one interest in the qualifying building |
| |
when the expenditure was incurred, and |
| |
(b) | one of those interests was reversionary on all the others, |
| 35 |
| the reversionary interest is the relevant interest in the qualifying |
| |
| |
(4) | An interest does not cease to be the relevant interest merely because |
| |
of the creation of a lease or other interest to which that interest is |
| |
| 40 |
| |
(a) | the relevant interest is a leasehold interest, and |
| |
(b) | that interest is extinguished on the person entitled to it |
| |
acquiring the interest which is reversionary on it, |
| |
|
| |
|
| |
|
| the interest into which the leasehold interest merges becomes the |
| |
relevant interest when the leasehold interest is extinguished. |
| |
360F | Interest acquired on completion of conversion |
| |
| For the purposes of determining the relevant interest in a qualifying |
| |
| 5 |
(a) | incurs expenditure on the conversion of a qualifying building |
| |
into qualifying business premises, and |
| |
(b) | is entitled to an interest in the qualifying building on or as a |
| |
result of the completion of the conversion, |
| |
| is treated as having had that interest when the expenditure was |
| 10 |
| |
| |
| |
| |
(1) | A person who has incurred qualifying expenditure in respect of any |
| 15 |
qualifying building is entitled to an initial allowance in respect of the |
| |
| |
(2) | The amount of the initial allowance is 100% of the qualifying |
| |
| |
(3) | A person claiming an initial allowance under this section may |
| 20 |
require the allowance to be reduced to a specified amount. |
| |
(4) | The initial allowance is made for the chargeable period in which the |
| |
qualifying expenditure is incurred. |
| |
360H | Premises not qualifying business premises or relevant interest sold |
| |
before premises first used or let |
| 25 |
(1) | No initial allowance is to be made under section 360G if, at the |
| |
relevant time, the qualifying building does not constitute qualifying |
| |
| |
(2) | An initial allowance which has been made in respect of a qualifying |
| |
building which is to be qualifying business premises is to be |
| 30 |
| |
(a) | the qualifying building does not constitute qualifying |
| |
business premises at the relevant time, or |
| |
(b) | the person to whom the allowance was made has sold the |
| |
relevant interest in the qualifying building before the |
| 35 |
| |
(3) | All such assessments and adjustments of assessments are to be made |
| |
as are necessary to give effect to this section. |
| |
(4) | In this section “the relevant time” means the time when the premises |
| |
are first used by the person with the relevant interest or, if they are |
| 40 |
not so used, the time when they are first suitable for letting for either |
| |
of the purposes mentioned in section 360D(1)(b). |
| |
|
| |
|
| |
|
| |
| |
360I | Entitlement to writing-down allowances |
| |
(1) | A person is entitled to a writing-down allowance for a chargeable |
| |
period if he has incurred qualifying expenditure in respect of a |
| 5 |
qualifying building and, at the end of the chargeable period— |
| |
(a) | the person is entitled to the relevant interest in the qualifying |
| |
| |
(b) | the person has not granted a long lease of the qualifying |
| |
building out of the relevant interest in consideration of the |
| 10 |
payment of a capital sum, and |
| |
(c) | the qualifying building constitutes qualifying business |
| |
| |
(2) | In subsection (1)(b) “long lease” means a lease the duration of which |
| |
| 15 |
(3) | Whether the duration of a lease exceeds 50 years is to be |
| |
| |
(a) | in accordance with section 303 of ITTOIA 2005, and |
| |
(b) | without regard to section 360Z3(3) of this Act (new lease |
| |
granted as a result of the exercise of an option treated as |
| 20 |
continuation of old lease). |
| |
(4) | A person claiming a writing-down allowance may require the |
| |
allowance to be reduced to a specified amount. |
| |
| |
(1) | The writing-down allowance for a chargeable period is 25% of the |
| 25 |
| |
(2) | The allowance is proportionately increased or reduced if the |
| |
chargeable period is more or less than a year. |
| |
(3) | The amount of the writing-down allowance for a chargeable period |
| |
is limited to the residue of qualifying expenditure. |
| 30 |
(4) | For this purpose the residue is ascertained immediately before |
| |
writing off the writing-down allowance at the end of the chargeable |
| |
| |
360K | Meaning of “the residue of qualifying expenditure” |
| |
The residue of qualifying expenditure is the qualifying expenditure |
| 35 |
that has not yet been written off in accordance with Chapter 9. |
| |
| |
GRANTS IN RESPECT OF QUALIFYING EXPENDITURE |
| |
360L | Grants affecting entitlement to allowances |
| |
(1) | No initial allowance or writing-down allowance under this Part is to |
| 40 |
be made in respect of expenditure to the extent that it is taken into |
| |
|
| |
|
| |
|
account for the purposes of a relevant grant or relevant payment |
| |
made towards that expenditure. |
| |
(2) | A grant or payment is relevant if it is— |
| |
(a) | a notified State aid other than an allowance under this Part, or |
| |
(b) | a grant or subsidy, other than a notified State aid, which the |
| 5 |
Treasury by order declares to be relevant for the purposes of |
| |
the withholding of initial allowances or writing-down |
| |
| |
(3) | For the purposes of subsection (2), “notified State aid” means a State |
| |
aid notified to and approved by the European Commission. |
| 10 |
(4) | If a relevant grant or relevant payment towards the expenditure is |
| |
made after the making of an initial allowance or a writing-down |
| |
allowance, the allowance is to be withdrawn to that extent. |
| |
(5) | If the amount of the relevant grant or relevant payment is repaid by |
| |
the grantee to the grantor, in whole or in part, the grant or payment |
| 15 |
is treated, to that extent, as never having been made. |
| |
(6) | All such assessments and adjustments of assessments are to be made |
| |
as are necessary to give effect to subsection (4) or (5). |
| |
(7) | Any such assessment or adjustment is not out of time if it is made |
| |
within 3 years of the end of the chargeable period in which the grant, |
| 20 |
payment or adjustment was made. |
| |
| |
| |
360M | When balancing adjustments are made |
| |
(1) | A balancing adjustment is made if— |
| 25 |
(a) | qualifying expenditure has been incurred in respect of a |
| |
| |
(b) | a balancing event occurs. |
| |
(2) | A balancing adjustment is either a balancing allowance or a |
| |
balancing charge and is made for the chargeable period in which the |
| 30 |
| |
(3) | A balancing allowance or balancing charge is made to or on the |
| |
person who incurred the qualifying expenditure. |
| |
(4) | No balancing adjustment is made if the balancing event occurs more |
| |
than 7 years after the time when the premises were first used, or |
| 35 |
suitable for letting, for either of the purposes mentioned in section |
| |
| |
(5) | If more than one balancing event within section 360N occurs, a |
| |
balancing adjustment is made only on the first of them. |
| |
| 40 |
(1) | The following are balancing events for the purposes of this Part— |
| |
(a) | the relevant interest in the qualifying building is sold; |
| |
|
| |
|
| |
|
(b) | a long lease of the qualifying building is granted out of the |
| |
relevant interest in consideration of the payment of a capital |
| |
| |
(c) | if the relevant interest is a lease, the lease ends otherwise than |
| |
on the person entitled to it acquiring the interest reversionary |
| 5 |
| |
(d) | the person who incurred the qualifying expenditure dies; |
| |
(e) | the qualifying building is demolished or destroyed; |
| |
(f) | the qualifying building ceases to be qualifying business |
| |
premises (without being demolished or destroyed). |
| 10 |
(2) | Section 360I(2) and (3) (meaning of “long lease”) applies for the |
| |
purposes of subsection (1)(b). |
| |
360O | Proceeds from balancing events |
| |
(1) | References in this Part to the proceeds from a balancing event are to |
| |
the amounts received or receivable in connection with the event, as |
| 15 |
| |
| |
TABLE: BALANCING EVENTS AND PROCEEDS |
| |
| | | | | | 1 The sale of the relevant interest. |
| The net proceeds of the sale. |
| | 20 | | 2 The grant of a long lease out of |
| If the capital sum paid in |
| | | | | consideration of the grant is less |
| | | | | than the commercial premium, the |
| | | | | | | | | | In any other case, the capital sum |
| | 25 | | | paid in consideration of the grant. |
| | | | 3 The coming to an end of a lease, |
| The market value of the relevant |
| | | | where a person entitled to the |
| interest in the qualifying building |
| | | | lease and a person entitled to any |
| at the time of the event. |
| | | | superior interest are connected |
| | | 30 | | | | | | | 4 The death of the person who |
| The residue of qualifying |
| | | | | expenditure immediately before |
| | | | | | | | | 5 The demolition or destruction of |
| The net amount received for the |
| | 35 | | | remains of the qualifying |
| | | | | | | | | | | | | | | received in respect of the |
| | | | | demolition or destruction, |
| | 40 | | | | | | | | (b) | any other compensation of |
| | | | | | | | | | | | | | | consists of capital sums. |
| | 45 |
|
|
| |
|
| |
|
| | | | | | 6 The qualifying building ceases to |
| The market value of the relevant |
| | | | be qualifying business premises. |
| interest in the qualifying building |
| | | | | at the time of the event. |
| | |
|
|
(2) | The amounts referred to in column 2 of the Table are those received |
| 5 |
or receivable by the person who incurred the qualifying expenditure. |
| |
(3) | In Item 2 of the Table “the commercial premium” means the |
| |
premium that would have been given if the transaction had been at |
| |
| |
360P | Calculation of balancing adjustments |
| 10 |
(1) | A balancing allowance is made if— |
| |
(a) | there are no proceeds from the balancing event, or |
| |
(b) | the proceeds from the balancing event are less than the |
| |
residue of qualifying expenditure immediately before the |
| |
| 15 |
(2) | The amount of the balancing allowance is the amount of— |
| |
(a) | the residue (if there are no proceeds); |
| |
(b) | the difference (if the proceeds are less than the residue). |
| |
(3) | A balancing charge is made if the proceeds from the balancing event |
| |
are more than the residue, if any, of qualifying expenditure |
| 20 |
immediately before the event. |
| |
(4) | The amount of the balancing charge is the amount of— |
| |
| |
(b) | the proceeds (if the residue is nil). |
| |
(5) | The amount of a balancing charge made on a person must not exceed |
| 25 |
| |
(a) | any initial allowances made to the person in respect of the |
| |
| |
(b) | any writing-down allowances made to the person in respect |
| |
of the expenditure for chargeable periods ending on or before |
| 30 |
the date of the balancing event giving rise to the balancing |
| |
| |
| |
WRITING OFF QUALIFYING EXPENDITURE |
| |
| 35 |
For the purposes of this Part qualifying expenditure is written off to |
| |
the extent and at the times specified in this Chapter. |
| |
360R | Writing off initial allowances and writing-down allowances |
| |
(1) | If an initial allowance is made in respect of the qualifying |
| |
expenditure, the amount of the allowance is written off at the time |
| 40 |
when the qualifying business premises are first used, or suitable for |
| |
|
| |
|
| |
|
letting for use, for either of the purposes mentioned in section |
| |
| |
(2) | If a writing-down allowance is made in respect of the qualifying |
| |
expenditure, the amount of the allowance is written off at the end of |
| |
the chargeable period for which the allowance is made. |
| 5 |
(3) | If a balancing event occurs at the end of the chargeable period |
| |
referred to in subsection (2), the amount written off under that |
| |
subsection is to be taken into account in calculating the residue of |
| |
qualifying expenditure immediately before the event to determine |
| |
what balancing adjustment (if any) is to be made. |
| 10 |
360S | Treatment of demolition costs |
| |
(1) | This section applies if— |
| |
(a) | a qualifying building is demolished, and |
| |
(b) | the person who incurred the qualifying expenditure incurs |
| |
the cost of the demolition. |
| 15 |
(2) | The net cost of the demolition is added to the residue of qualifying |
| |
expenditure immediately before the demolition. |
| |
(3) | “The net cost of the demolition” means the amount, if any, by which |
| |
the cost of the demolition exceeds any money received for the |
| |
remains of the qualifying building. |
| 20 |
(4) | If this section applies, neither the cost of the demolition nor the net |
| |
cost of the demolition is treated for the purposes of any Part of this |
| |
Act as expenditure on any other property replacing the qualifying |
| |
| |
| 25 |
ADDITIONAL VAT LIABILITIES AND REBATES |
| |
| |
For the purposes of this Chapter— |
| |
(a) | “additional VAT liability” and “additional VAT rebate” have |
| |
the meanings given by section 547, |
| 30 |
| |
(i) | a person incurs an additional VAT liability, or |
| |
(ii) | an additional VAT rebate is made to a person, |
| |
| is given by section 548, and |
| |
(c) | the chargeable period in which, and the time when, an |
| 35 |
additional VAT liability or an additional VAT rebate accrues |
| |
are given by section 549. |
| |
360U | Additional VAT liabilities and initial allowances |
| |
(1) | This section applies if— |
| |
(a) | a person was entitled to an initial allowance under this Part |
| 40 |
in respect of qualifying expenditure on a qualifying building, |
| |
(b) | that person incurs an additional VAT liability in respect of |
| |
| |
|
| |
|