107. In general.

Plant and machinery allowances1 are restricted if a person ('B') enters into a relevant transaction with another person ('S') and:

  1.  

    (1)     B and S are connected with each other2;

  2.  

    (2)     the transaction:

    1.  

      (a)     has an avoidance purpose3; or

    2.  

      (b)     is part of, or occurs as a result of, a scheme or arrangement that has an avoidance purpose4; or

  3.  

    (3)     the plant or machinery continues to be used for the purposes of a qualifying activity5 carried on by S, or is used after the date of the transaction6 for the purposes of a qualifying activity carried on by S or