Capital Allowances Act 2001 Schedule 3 paragraph 22

Recovery of first-year allowances in case of joint lessees

Schedule 3 paragraph 22 deals with how first-year allowances are recovered where plant or machinery has been leased overseas and the lessees are joint lessees, ensuring that the recovery rules apply to first-year allowances in the same way as they apply to normal writing-down allowances.

• The provision applies where expenditure on plant or machinery leased overseas has qualified for a first-year allowance, either under the former CAA 1990 rules or the transitional provisions
• The recovery mechanism for joint lessees is extended so that references to expenditure qualifying for normal writing-down allowances also cover expenditure that qualified for first-year allowances
• This ensures that first-year allowances cannot escape the clawback rules simply because they were a different type of allowance from writing-down allowances
• The detailed recovery calculations, including the method for computing the amount to be recovered, apply equally to first-year allowances as they do to writing-down allowances