Capital Allowances Act 2001 Schedule 3 paragraph 26

Abandonment expenditure incurred before cessation of ring fence trade

Schedule 3, paragraph 26 provides a transitional rule that disapplies section 164 (which deals with general decommissioning expenditure incurred before cessation of a ring fence trade) where the relevant expenditure was incurred in a chargeable period ending before 1 July 1991.

• Section 164 sets out rules for how abandonment (decommissioning) expenditure is treated when incurred before a ring fence trade ceases.
• Paragraph 26 introduces a cut-off date: if the chargeable period in which the abandonment expenditure was incurred ended before 1 July 1991, section 164 does not apply.
• This means that any abandonment expenditure falling within a chargeable period ending before that date is governed by the rules that were in force at the time, rather than by section 164.
• The provision acts as a transitional safeguard, ensuring that the section 164 regime only applies to expenditure incurred in chargeable periods ending on or after 1 July 1991.