835HA Interaction with capital allowances provisions.

(1) Section 835C shall not apply in computing the amount of—

(a) any allowances to be made to the acquirer under the provisions of the Tax Acts in respect of capital expenditure incurred on an asset where the total amount of capital expenditure incurred on the asset does not exceed €25 million,

(b) any allowances to be made to the acquirer in respect of capital expenditure incurred on a specified intangible asset to which section 291A applies in circumstances where, under section 288(3C), the amount of that expenditure is deemed, for the purposes of Chapters 2 and 4 of Part 9, to be the amount of expenditure still unallowed on the specified intangible asset,

(c) any balancing allowance or balancing charge to be made to, or on, the supplier of an asset under the provisions of the Tax Acts where at the time of the event giving rise to the balancing allowance or balancing charge, as the case may be, the market value of the asset does not exceed €25 million, or

(d) any allowances to be made to an acquirer in respect of capital expenditure incurred on an asset, or any balancing allowance or balancing charge to be made to, or on, the supplier in respect of the supply of that asset, in circumstances where—

(i) the acquirer and supplier make a joint election under—

(I) section 289(6), or

(II) section 312(5)(a),

(ii) the supply and acquisition of the asset occurs as part of the transfer of the whole or part of a trade to which—

(I) section 308A(3),

(II) section 310(3),

(III) section 400(6),

(IV) section 631(2), or

(V) section 670(12), applies,

(iii) the supply and acquisition of the asset occurs in the course of a merger to which section 633A applies,

(iv) the supply and acquisition is of an interest in farm land to which section 658(9) applies,

(v) the supply and acquisition of the asset occurs in the course of a conversion of a building society to a company, to which paragraph 1 of Schedule 16 applies, or

(vi) the supply and acquisition of the asset occurs in the course of a transfer, to which paragraph 2 of Schedule 17 applies, from a trustee savings bank to a successor company.

(2) (a) In determining whether, for the purposes of subsection (1)(a), the capital expenditure incurred on an asset (referred to in this paragraph as the “first-mentioned asset” ) exceeds €25 million (referred to in this paragraph and paragraph (b) as the “?25 million threshold” ), there shall be added to the capital expenditure incurred on that asset any capital expenditure incurred on another asset where—

(i) that other asset had, at any time, formed part of the same asset as the first-mentioned asset, and

(ii) as part of a scheme to avoid reaching the ?25 million threshold in relation to the first-mentioned asset and the other asset, was acquired by the acquirer under a separate arrangement.

(b) In determining whether, for the purposes of subsection (1)(c), the market value of an asset (referred to in this paragraph as the “first- mentioned asset” ) exceeds the ?25 million threshold, there shall be added to the market value of that asset the market value of any other asset which—

(i) had at any time formed part of the same asset as the first- mentioned asset, and

(ii) as part of a scheme to avoid reaching the ?25 million threshold in relation to the first-mentioned asset and the other asset, was supplied by the supplier under a separate arrangement.

(3) Where section 835C applies in computing any deductions or additions to be made to the acquirer or supplier of an asset, as the case may be, in respect of allowances and charges relating to capital expenditure on an asset—

(a) subject to subsection (4), this Part shall apply notwithstanding any provision in Part 9, 10, 23, 24, 24A, 29 or 36 or Schedule 18B as to the computation of allowances or charges relating to capital expenditure, and

(b) the amount of any balancing charge to be made on the supplier of an asset shall not exceed the amount of capital expenditure incurred by the supplier on that asset.

(4) Section 835C shall not apply instead of any other provision of Part 9, 10, 23, 24, 24A, 29 or 36 or Schedule 18B if its application would result in the amount of—

(a) any allowances to be made to an acquirer in respect of capital expenditure incurred on an asset being higher, or

(b) any balancing allowance to be made to a supplier arising from the supply of an asset being higher, or

(c) any balancing charge to be made on a supplier arising from the supply of an asset being lower,

than would be the case under the provision or provisions concerned of Part 9, 10, 23, 24, 24A, 29 or 36 or Schedule 18B.

(5) Where, subject to this section, section 835C applies in computing the amount of any allowances to be made to an acquirer in respect of capital expenditure incurred on a specified intangible asset (within the meaning of section 291A), section 291A(3) shall, in each chargeable period, apply with any necessary modifications to give effect to section 835C(2)(a).