Section 317 | Reduction in respect of disposal receipts under CAA 2001

(1)This section applies in the case of the qualifying company if—

(a)it incurs qualifying pre-commencement expenditure in respect of a ring fence trade in any pre-commencement period,

(b)it would, on the relevant assumption, be entitled to an allowance under any provision of CAA 2001 in respect of that expenditure,

(c)an event occurs in relation to any asset representing the expenditure in any pre-commencement period, and

(d)the event would, on the relevant assumption, require a disposal value (the “deductible amount”) to be brought into account under any provision of CAA 2001 for any pre-commencement period.

(2)The relevant assumption is that the company was carrying on the ring fence trade—

(a)when the expenditure was incurred, and

(b)when the event giving rise to the disposal value occurred.

(3)For the purpose of allocating qualifying pre-commencement expenditure to the pool for each pre-commencement period—

(a)find the total amount of the disposal values in the case of all such events (amount D), and

(b)taking later periods before earlier periods, reduce (but not below nil) amount E for any pre-commencement period by setting against it so much of amount D as does not fall to be set against amount E for a later pre-commencement period.

(4)This section is subject to section 318A(5) (exclusion of deductible amounts in respect of pre-2013 expenditure when determining pre-commencement supplement for additional 4 periods).^F1