»Ê¹ÚÌåÓýapp

CAA2001\S45F

»Ê¹ÚÌåÓýapp conditions for expenditure to be first-year qualifying expenditure are set out in CAA2001\S45F(1). It must be -

• incurred on or after 17 April 2002
• incurred by a company
• incurred on the provision of plant or machinery for use wholly for the purposes of a ring fence trade (OT21245)
• not be excluded by CAA01\S46 (general exclusions).

»Ê¹ÚÌåÓýappre are eight exclusions in CAA01\S46(2) (see CA23110). »Ê¹ÚÌåÓýappse prevent first-year allowances being given for certain expenditure. »Ê¹ÚÌåÓýapp two most likely exclusions to be met in ring fence trades are expenditure on ships and plant or machinery for leasing. »Ê¹ÚÌåÓýapp definition of ships (CAA2001\S94) excludes offshore installations, this term is likely to include most Floating, Production Storage and Offloading Vessels (FPSO’s). FPSO’s may therefore qualify for first-year allowance at 100%.

First-year allowances were generally not due on decommissioning expenditure, because such expenditure is not on the provision of plant or machinery. However, most decommissioning expenditure incurred on or after 12 March 2008 will qualify for the 100% special allowance available under CAA2001\S164 as FA2008\S108 disapplied the CAA2001\S163(3) requirement that decommissioning expenditure should be in connection with an abandonment programme.

Ring fence first-year allowances are restricted to trades subject to the supplementary charge (CAA2001\S45F(3)). So, for example, leasing trades will not be eligible for these first-year allowances.

Long Life Assets

»Ê¹ÚÌåÓýapp 100% rate for first-year allowances applies to all qualifying expenditure incurred on or after 12 March 2008 as FA2008\S108 disapplied the long life asset regime in respect of capital expenditure on plant and machinery used wholly in a ring fence trade.