Section 46 | General exclusions ...

(1)Expenditure within any of the general exclusions in subsection (2) is not first-year qualifying expenditure under any of the following provisions—^{F1F2F3F4F5F6F7F8F9F10F11F12F13F14F15}

(2)The general exclusions are—^{F16F17F18F19F20}

General exclusion 1The expenditure is incurred in the chargeable period in which the qualifying activity is permanently discontinued.

General exclusion 2The expenditure is incurred on the provision of a car (as defined by section 268A).

General exclusion 5The expenditure would be long-life asset expenditure but for paragraph 20 of Schedule 3 (transitional provisions).

General exclusion 6The expenditure is on the provision of plant or machinery for leasing (whether in the course of a trade or otherwise).For this purpose, the letting of a ship on charter, or of any other asset on hire, is to be regarded as leasing (whether or not it would otherwise be so regarded).

General exclusion 7The circumstances of the incurring of the expenditure are that—

the provision of the plant or machinery on which the expenditure is incurred is connected with a change in the nature or conduct of a trade or business carried on by a person other than the person incurring the expenditure, and

the obtaining of a first-year allowance is the main benefit, or one of the main benefits, which could reasonably be expected to arise from the making of the change.

General exclusion 8 Any of the following sections applies—This is subject to section 161 (pre-trading expenditure on mineral exploration and access).

section 13 (use for qualifying activity of plant or machinery provided for other purposes);

section 13A (use for other purposes of plant or machinery provided for long funding leasing);

section 14 (use for qualifying activity of plant or machinery which is a gift).

(3)Subsection (1) is subject to the following provisions of this section.^F21

(4)General exclusion 2 does not prevent expenditure being first-year qualifying expenditure under section 45D.^F21

(4A)General exclusion 6 does not prevent expenditure being first-year qualifying expenditure under section 45S if the plant or machinery is provided for leasing under an excluded lease of background plant or machinery for a building.^F22

(4B)General exclusion 6 does not prevent expenditure being first-year qualifying expenditure under section 45U if—^F23

(a)the plant or machinery is provided for leasing to a lessee for use by the lessee wholly, or almost wholly, for the purpose of earning income which is within the charge to tax, or^F23

(b)the plant or machinery is provided for leasing to a lessee who is resident in the United Kingdom where the circumstances are such that the plant or machinery is not for use (to a significant extent) by the lessee for the purpose of earning income which is from a source outside the United Kingdom and which is outside the charge to tax.^F23

(4C)For the purposes of subsection (4B) income is to be regarded as being outside the charge to tax if the income arises to a person who under—^F23

(a)double taxation arrangements, or^F23

(b)unilateral relief arrangements,^F23

is afforded or is entitled to claim any relief from the tax chargeable on the income.

(4D)For this purpose “double taxation arrangements” and “unilateral relief arrangements” have the same meaning as they have in Part 2 of the Taxation (International and Other Provisions) Act 2010 (see sections 2(4) and 8(1) respectively).^F23

(4E)For the purposes of subsection (4B) it is to be presumed that, unless the contrary is shown, a lessee has made every claim or election for relief from tax, and every claim or election for an exemption from tax, which the lessee is entitled to make.^F23

(4F)For the purposes of subsection (4B), if there is more than one lessee, references to the lessee are to each of the lessees.^F23

(4G)For the purposes of subsections (4B) to (4F), any reference to leasing or a lessee includes sub-leasing and a sub-lessee.^F23

(5)Repealed^F24

(6)Repealed^F24