»Ê¹ÚÌåÓýapp

CAA01/S107 - S109

Expenditure on plant or machinery to which the overseas leasing legislation applies is put into a pool separate from all the other pools. »Ê¹ÚÌåÓýapp annual rate of WDA for the overseas leasing pool is 10%. It is not a single asset pool. It contains all the expenditure on plant or machinery to which the overseas leasing legislation applies apart from:

• expenditure on long life assets: they stay in the long life asset pool on which WDAs are given at an annual rate of 6%, up 1/6 April 2008 when the balance was transferred to the special rate pool* and
• expenditure that must be allocated to a single asset pool, such as expenditure on an asset that is used partly for non-business purposes. WDAs on the single asset pool are given at an annual rate of 10%.

If a person disposes of plant or machinery leased overseas to a connected person and has to bring a disposal value to account, that disposal value is the lower of:

• the market value of the plant or machinery, and
• the qualifying expenditure incurred by the person disposing of the plant or machinery.

»Ê¹ÚÌåÓýapp person acquiring the plant or machinery is treated as incurring qualifying expenditure equal to the disposal value.

Example: Bob and Sara are married. Bob owns a yacht that he leases overseas. »Ê¹ÚÌåÓýapp yacht cost him £100,000. After two years, when the market value of the yacht is £95,000, he sells it to Sara for £50,000. Bob’s disposal value is £95,000 because that is the lower of the market value of the yacht, £95,000, and Bob’s qualifying expenditure, £100,000. If Sara decides to lease the yacht her qualifying expenditure is £95,000, Bob’s disposal value.

*FA2011 reduced the rate of special rate WDAs from 10% to 8% from 1 April 2012 (CT) and 6 April 2012 (IT).