Commentary

B3.350 Ships—pooling and postponement of plant and machinery allowances

Business tax
Business tax | Commentary

B3.350 Ships—pooling and postponement of plant and machinery allowances

Business tax | Commentary

B3.350 Ships—pooling and postponement of plant and machinery allowances

Pooling

Qualifying expenditure incurred on the provision of a ship for the purposes of a qualifying activity, if allocated to a pool (see B3.332), must be allocated to a single asset pool1 (a 'single ship pool'), subject to the exceptions described below and any election made to use the appropriate non-ship pool (the pool to which the expenditure would otherwise be allocated; see below)2.

Expenditure is not to be allocated to a single ship pool if the ship is provided for leasing3 unless:

  1.  

    •     it appears that throughout the designated period the ship will be used only for a qualifying purpose, and

  2.  

    •     the ship is not used for overseas leasing under a lease finalised before 1 April 2006 at any time in the designated period, or if it is, is used only for protected leasing

The terms 'leasing', 'overseas leasing', 'protected leasing', 'qualifying purpose' and 'designated period' have the same meaning as described in B3.340T4.

A further exception is where the qualifying activity for the purposes of which the ship is provided is special leasing of plant or machinery5.

The effect is that the computation of allowances for each ship subject to these rules is

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