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Amendment , Page , Line 4 *SC 163 109 4 Mr Alan Milburn - La - Darlington Schedule 6, page 109, line 4, at end insert- "This Schedule does not apply to a payment or benefit if or to the extent that it is taken into account under section 153 of the Capital Allowances Act 1990 (subsidies, contributions, &c.) to reduce the recipient's expenditure qualifying for capital allowances." __________________ EXPLANATORY NOTE SUMMARY 1. Clause 50 and Schedule 6 charge reverse premiums as a revenue receipt. The purpose of the amendment is to ensure that a sum is not subject to the new charge if it reduces the recipient's expenditure eligible for capital allowances. It prevents what might otherwise be an effective double tax charge in some cases. ________________________________ DETAIL OF THE AMENDMENT 2. Amendment 163 inserts a new paragraph in Schedule 6 which provides that where a contribution is taken into account in calculating the amount of expenditure which qualifies for capital allowances, it will not be charged to tax as a reverse premium under Schedule 6. BACKGROUND NOTE 3. The capital allowance code restricts allowances in respect of capital expenditure where it is "met" by a third party by way of a contribution. A reverse premium can take the form of a contribution towards costs which qualify for capital allowances, and the interaction of Clause 50 and Schedule 6 as currently drafted and the Capital Allowances code makes it possible both to charge a reverse premium as revenue under the new provisions, and to deduct the same sum from the tenant's expenditure qualifying for capital allowances - in effect a double charge. _________________________________________________ CONTACTS CAROLYN HUBBARD JUDY COHEN |
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