Anti-avoidance provisions apply to restrict plant and machinery allowances in certain circumstances where there is a 'relevant transaction'.
Meaning of relevant transaction
For the purposes of the provisions described below and in B3.340H–B3.340S, a person ('B') and another person ('S') enter into a 'relevant transaction' (which include sales, hire purchase contracts and assignment of hire purchase contracts1) if2:
(A) S sells plant or machinery to B
(B) B enters into a contract with S providing that B shall or may become the owner of plant or machinery on the performance of the contract, or
(C) S assigns to B the benefit of a contract providing that S shall or may become the owner of plant or machinery on the performance of the contract
For transactions before 25 November 2015 the wording referred to B entering into a relevant transaction with S. The wording was amended to clarify that the restrictions apply to both B and S.
References to B's expenditure are references to capital expenditure incurred under whichever of these relevant transactions applies3.
If B is treated4 as having incurred capital expenditure on the provision of plant or machinery which was received as a gift and the donor of the plant or machinery was S, B is treated as having incurred capital expenditure on the provision of the plant or machinery by purchasing it from S5.
For relevant transactions in (A) to (C) above entered into on or after 25 November 2015, the disposal value of the plant