Finance Act 2006

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Capital allowances for hotels, holiday camps and holiday cottages.

27.— (1) Chapter 1 of Part 9 of the Principal Act is amended—

(a) in section 268(13)—

(i) in paragraph (a) by substituting “subject to paragraphs (b) and (c)” for “subject to paragraph (b)”,

(ii) in paragraph (b) by substituting “31 December 2006” for “31 July 2006”, and

(iii) by inserting the following after paragraph (b):

“(c) This subsection shall not apply as respects expenditure incurred on or before 31 July 2008 on the construction or refurbishment of a holiday cottage if—

(i) the conditions of subparagraph (i), (ii) or (iii), as the case may be, of paragraph (b) have been satisfied,

(ii) subject to paragraphs (a) and (b) of section 270(7)—

(I) the person who is constructing or refurbishing the holiday cottage has, on or before 31 December 2006, carried out work to the value of not less than 15 per cent of the actual construction or, as the case may be, refurbishment costs of the holiday cottage, and

(II) the person referred to in clause (I) or, where the holiday cottage is sold by that person, the person who is claiming a deduction under this Chapter in relation to the expenditure incurred, can show that the condition in clause (I) was satisfied,

(iii) a binding contract in writing under which expenditure on the construction or refurbishment of the holiday cottage is incurred was in existence on or before 31 July 2006, and

(iv) such other conditions, as may be specified in regulations made for the purposes of this subparagraph by the Minister for Finance, have been satisfied; but such conditions shall be limited to those necessary to ensure compliance with the laws of the European Communities governing State aid or with a decision of the Commission of the European Communities as to whether aid to which this subsection relates is compatible with the common market having regard to Article 87 of the European Communities Treaty.”,

(b) in section 272—

(i) in subsections (3)(c)(iii) and (4)(c)(iii) by substituting “subject to subsections (8) and (9)” for “subject to subsection (8)”,

(ii) in subsection (8) by substituting “31 December 2006” for “31 July 2006”, and

(iii) by inserting the following after subsection (8):

“(9) Subsections (3)(c)(iii) and (4)(c)(iii) shall not apply as respects capital expenditure incurred on or before 31 July 2008 on the construction or refurbishment of a building or structure if—

(a) the conditions of paragraph (a), (b), (ba) or (c), as the case may be, of subsection (8) have been satisfied,

(b) subject to paragraphs (a) and (b) of section 270(7)—

(i) the person who is constructing or refurbishing the building or structure has, on or before 31 December 2006, carried out work to the value of not less than 15 per cent of the actual construction or, as the case may be, refurbishment costs of the building or structure, and

(ii) the person referred to in subparagraph (i) or, where the building or structure is sold by that person, the person who is claiming a deduction under this Chapter in relation to the expenditure incurred, can show that the condition in subparagraph (i) was satisfied,

(c) a binding contract in writing under which expenditure on the construction or refurbishment of the building or structure is incurred was in existence on or before 31 July 2006, and

(d) such other conditions, as may be specified in regulations made for the purposes of this paragraph by the Minister for Finance, have been satisfied; but such conditions shall be limited to those necessary to ensure compliance with the laws of the European Communities governing State aid or with a decision of the Commission of the European Communities as to whether aid to which this subsection relates is compatible with the common market having regard to Article 87 of the European Communities Treaty.”,

and

(c) in section 274—

(i) in subsection (1)(b)(iii)(III) by substituting “subject to subsections (1A) and (1B)” for “subject to subsection (1A)”,

(ii) in subsection (1A) by substituting “31 December 2006” for “31 July 2006”, and

(iii) by inserting the following after subsection (1A):

“(1B) Subsection (1)(b)(iii)(III) shall not apply as respects capital expenditure incurred on or before 31 July 2008 on the construction or refurbishment of a building or structure if—

(a) the conditions of paragraph (a), (b), (ba) or (c), as the case may be, of subsection (1A) have been satisfied,

(b) subject to paragraphs (a) and (b) of section 270(7)—

(i) the person who is constructing or refurbishing the building or structure has, on or before 31 December 2006, carried out work to the value of not less than 15 per cent of the actual construction or, as the case may be, refurbishment costs of the building or structure, and

(ii) the person referred to in subparagraph (i) or, where the building or structure is sold by that person, the person who is claiming a deduction under this Chapter in relation to the expenditure incurred, can show that the condition in subparagraph (i) was satisfied,

(c) a binding contract in writing under which expenditure on the construction or refurbishment of the building or structure is incurred was in existence on or before 31 July 2006, and

(d) such other conditions, as may be specified in regulations made for the purposes of this paragraph by the Minister for Finance, have been satisfied; but such conditions shall be limited to those necessary to ensure compliance with the laws of the European Communities governing State aid or with a decision of the Commission of the European Communities as to whether aid to which this subsection relates is compatible with the common market having regard to Article 87 of the European Communities Treaty.”,

(2) This section shall come into operation on such day or days as the Minister for Finance may by order or orders appoint and different days may be appointed for different purposes or different provisions.