SolvedCA23195E | Plant and Machinery Allowance (PMA): First-Year Allowance (FYA): 40% First-Year Allowance: Anti-avoidance
From HM Revenue & Customs · Capital Allowances Manual
Section 45V CAA01
Anti-avoidance
The targeted anti-avoidance rules in Chapter 17 of Part 2 CAA01 apply to the 40% FYA. There is guidance about these rules at CA28000. Those rules are supplemented by additional anti-avoidance rules introduced for the purposes of the 40% FYA.
Expenditure is not first-year qualifying expenditure under Section 45U CAA01, thus cannot qualify for the 40% FYA, if the expenditure is incurred directly or indirectly in consequence of, or otherwise in connection with, “disqualifying arrangements”.
Arrangements are “disqualifying arrangements” if both of the following conditions are met:
“Tax advantage” is defined by Section 577(4) CAA01 (CA11850).
“Arrangements” include any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable).
HMRC does not provide clearance on the application of anti-avoidance provisions and whether those provisions apply in a certain set of circumstances will be entirely dependent on the facts.