Section 1147 — Corporation Tax Act 2009: Deduction for capital expenditure

Deduction for capital expenditure 1147 1 A company is entitled to relief for an accounting period if conditions A, B and C are met.

2 Condition A is that a major interest in land in the United Kingdom is, or has been, acquired by the company for the purposes of a UK property business or a trade carried on by it.

3 Condition B is that—

a in the case of land in a contaminated state, the land was in a contaminated state at the time of the acquisition, and b in the case of land in a derelict state, the land was in a derelict state throughout the period beginning with the earlier of—

i 1 April 1998, and ii the date on which a major interest in the land was first acquired by the company or a person who was connected with the company. 3A The Treasury may by order—

a specify circumstances in which the condition in paragraph (a) of subsection (3) need not be met, or b replace the date for the time being specified in paragraph (b)(i) of that subsection with a later date. 3B An order under subsection (3A) may contain incidental, supplemental, consequential and transitional provision and savings.

4 Condition C is that the company incurs capital expenditure which is qualifying land remediation expenditure in respect of the land.

5 For the company to obtain the relief it must make an election.

6 The relief is that for corporation tax purposes the capital expenditure is allowed as a deduction in calculating the profits of the UK property business or the trade for the period in which the expenditure is incurred.

7 For the purposes of this section capital expenditure incurred for the purposes of a UK property business or a trade by a company about to carry on the business or trade is to be treated as incurred by the company—

a on the first day on which it does carry it on, and b in the course of doing so.

8 Relief is not available under this section in relation to so much of the qualifying land remediation expenditure as represents capital expenditure in respect of which an allowance , other than an allowance under Part 2A of CAA 2001 (structures and buildings allowances), has been, or may be, made under the enactments relating to capital allowances.