OT21564 | Investment Allowance: Operating and leasing expenditure

Operating and leasing expenditure are defined at Regulation 3 and Regulation 4 respectively of The Investment Allowance and Cluster Area Allowance (Investment Expenditure) Regulations 2017 (Link).

Excluded expenditure is defined at Regulations 5 to 7. This includes a purpose test at Regulation 7 which targets arrangements where the main purpose, or one of the main purposes, is, inter alia, to enable expenditure to qualify as investment expenditure where it would otherwise not have done so (or for such expenditure to be incurred at a different date to that on which it would otherwise have been incurred), to generate or increase investment allowance or cluster area allowance or to generate either allowance at an earlier time than it would otherwise have been generated.

Regulation 8 sets out when expenditure under the Regulations is to be treated for the purposes of Chapters 6A and 9 of Part 8 of CTA10 as incurred.