(4) If subsection (3) does not apply in relation to a transitional chargeable period, the writing-down allowance to which the person is entitled for that chargeable period is to be determined by—

(a) calculating the apportioned writing-down allowance for each financial year (for corporation tax purposes) or tax year (for income tax purposes) in which part of the chargeable period falls, and

(b) adding the amounts of the apportioned writing-down allowance for each of those years.

(5) For the purposes of Part 3 of CAA 2001 (industrial buildings), the apportioned writing-down allowance for a financial year or tax year in which part of a transitional chargeable period falls is—

(6) For the purposes of Part 4 of CAA 2001 (agricultural buildings), the apportioned writing-down allowance for a financial year or tax year in which part of a transitional chargeable period falls is—

(7) The relevant days in the chargeable period are the days in that period for which the person was entitled to the relevant interest in relation to the qualifying expenditure (within the meaning of Part 4 of CAA 2001).

(8) For the purposes of CAA 2001, the residue of the qualifying expenditure at any time is to be calculated as if the writing-down allowance made to a person under Part 3 or 4 of that Act in respect of the qualifying expenditure for any transitional chargeable period were the writing-down allowance which would have been made apart from this section.

(9) This section applies—

(a) for corporation tax purposes, to chargeable periods which begin before the relevant date and end on or after 1 April 2008, and

(b) for income tax purposes, to chargeable periods which begin before the relevant date and end on or after 6 April 2008.

(10) In this section references to the table are to the following table—

(11) In this section—

• “the relevant date” has the same meaning as in section 84, and

• “qualifying expenditure”, in relation to a writing-down allowance under Part 3 or 4 of CAA 2001, means the qualifying expenditure in respect of which the allowance is made.

86 Qualifying enterprise zone expenditure: transitional provision

(1) For a chargeable period which begins before, and ends on or after, the relevant date, a person’s entitlement to a writing-down allowance under Part 3 of CAA 2001 in respect of qualifying enterprise zone expenditure is to be determined in accordance with subsection (2).

(2) The writing-down allowance to which the person is entitled is—

(3) In this section “the relevant date” has the same meaning as in section 84.

87 Phasing out of industrial buildings allowance: anti-avoidance

(1) In CAA 2001, after section 313 insert—

“313A Calculation of allowance after sale of relevant interest: anti-avoidance

(1) This section applies where—

(a) there is a sale of the relevant interest in the building which is a balancing event to which section 314 applies,

(b) the buyer and seller have different chargeable periods,

(c) the control test (within the meaning of section 567) is met, and

(d) the purpose, or one of the main purposes, of the sale is the obtaining of a tax advantage by the buyer under this Part.

(2) The writing-down allowance to which the buyer is entitled for the chargeable period in which the sale takes place is—

(2) The amendment made by subsection (1) has effect in relation to the sale of a relevant interest on or after 12 March 2008, except for such a sale in pursuance of a relevant pre-commencement contract (and for this purpose “sale” has the same meaning as for the purposes of Part 3 of CAA 2001).

(3) A contract is a relevant pre-commencement contract if—

(a) the contract is a contract in writing made before 12 March 2008,

(b) the contract is unconditional or its conditions have been satisfied before that date,

(c) no terms remain to be agreed on or after that date, and

(d) the contract is not varied in a significant way on or after that date.

Supplementary provision

88 Power to make consequential and transitional provision

(1) The Treasury may by order make such amendments (including repeals and revocations) of enactments or instruments as may appear appropriate in consequence of, or otherwise in connection with, sections 71 to 87.

(2) The Treasury may by order make such transitional or saving provision as may appear appropriate in consequence of, or otherwise in connection with, those sections.

(3) An order under subsection (1) may make transitional provision and savings.

(4) An order under subsection (1) or (2) may—

(a) make different provision for different cases, and

(b) include provision having effect in relation to times before the order is made if that provision does not increase any person’s liability to tax.

(5) An order under subsection (1) or (2) is to be made by statutory instrument.

(6) A statutory instrument containing an order under subsection (1) or (2) is subject to annulment in pursuance of a resolution of the House of Commons.

Anti-avoidance

89 Balancing allowances on transfers of trade

(1) After section 343 of ICTA insert—

“343ZA Transfers of trade to obtain balancing allowances

(1) This section applies where—

(a) a company (“the predecessor”) ceases to carry on a trade,

(b) another company (“the successor”) begins to carry on the activities of that trade as its trade or as part of its trade,

(c) in the accounting period in which the predecessor ceases to carry on the trade the predecessor would (apart from this section) be entitled under Part 2 of the Capital Allowances Act to a balancing allowance in respect of the trade, and

(d) the predecessor’s ceasing to carry on the trade is part of a scheme or arrangement the main purpose, or one of the main purposes, of which is to entitle the predecessor to that balancing allowance.

(2) This section also applies where—

(a) a company (“the predecessor”) ceases to carry on part of a trade,

(b) another company (“the successor”) begins to carry on the activities of that part of the trade as its trade or as part of its trade, and

(c) the predecessor’s ceasing to carry on the part of the trade mentioned in paragraph (a) is part of a scheme or arrangement the main purpose, or one of the main purposes, of which is to entitle the predecessor, on cessation of the trade, to a balancing allowance in respect of the trade under Part 2 of the Capital Allowances Act.

(3) This section does not apply where section 343 applies.

(4) Where this section applies, the Corporation Tax Acts have effect subject to section 343(2), but as if the words “and are subject to section 343A (company reconstructions involving business of leasing plant or machinery)” were omitted.

(5) Where this section applies because of subsection (1), and the successor carries on the activities of the trade the predecessor ceased to carry on as part of the successor’s trade, for the purposes of section 343(2) that part of the successor’s trade is to be treated as a separate trade carried on by the successor.

(6) Where this section applies because of subsection (2), for the purposes of section 343(2)—

(a) that part of the trade which the predecessor ceased to carry on is to be treated as a separate trade carried on by the predecessor, and

(b) where the successor carries on the activities of that part of the trade as part of its trade, that part of the successor’s trade is to be treated as a separate trade carried on by the successor.

(7) Where subsection (5) or (6) applies, such apportionment of receipts, expenses, assets and liabilities is to be made as may be just.

(8) Section 343(10) applies to an apportionment under subsection (7) as it applies to an apportionment under section 343(9).”

(2) The amendment made by subsection (1) has effect in relation to the cessation of a trade or part of a trade on or after 12 March 2008.