Policy paper

Draft legislation: plant and machinery allowances - anti-avoidance

This draft clause and schedule amends part 2 of the Capital Allowances Act 2001 about anti-avoidance rules for transactions between connected parties or sale or leaseback transactions.

Documents

Draft legislation: plant and machinery allowances - anti-avoidance

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Explanatory note: plant and machinery allowances - anti-avoidance

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Details

HM Revenue and Customs (HMRC) has published a draft clause and schedule, Tax Information and Impact Note, and explanatory note concerning amendments to part 2 of the Capital Allowances Act 2001.

HMRC recently became aware of proposed sale and leaseback transactions for plant and machinery. It is contended that the effect of the sale and leaseback is to create substantial capital allowances on assets that previously entitled the owner to no allowances. The government announced on 26 February 2015 it’s intention to remove the opportunity for avoidance in this area.

The draft clause schedule will achieve this and will take immediate effect.

If you have any questions about this change, please contact HMRC’s Capital Allowances policy team by email: caguidance.ct&vat@hmrc.gsi.gov.uk.

Published 26 February 2015