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HMRC internal manual

Oil Taxation Manual

Non-Residents Working on the UK Continental Shelf: Capital Allowances - Plant & machinery brought into the UK - Entitlement to allowance

CAA01\S13

Without the provision at CAA01\S13, a taxpayer introducing any plant or machinery previously used elsewhere in the worldwide trade into the UK Continental Shelf activities would have no entitlement to capital allowances. CAA01\S13 provides for a person to be treated as having incurred qualifying expenditure if they start to use the plant or machinery in a qualifying activity.

The section says

  1. This section applies if a person-

 

 

  1. brings plant or machinery into use for the purposes of a qualifying activity carried on by him, and
  2. on the date when he does so, owns the plant or machinery as a result of having incurred capital expenditure (“actual expenditure”) on its provision for purposes other than those of that qualifying activity.

 

  1. The person is to be treated-

 

 

  1. as having incurred capital expenditure (“notional expenditure”) on the provision of the plant or machinery for the purposes of the qualifying activity on the date on which it is brought into use for those purposes, and
  2. as owning the plant or machinery as a result of having incurred that expenditure.

See OT42530 - OT42610 for the rules that establish the amount of qualifying expenditure in these circumstances.