Taxes Consolidation Act 1997 section 316

Interpretation of certain references to expenditure and time when expenditure is incurred

Section 316 provides rules for interpreting references to "capital expenditure" and "capital sums" in Part 9, clarifies when expenditure is treated as "incurred", and addresses specific timing rules for certain tax incentive schemes and pre-trading expenditure.

• Capital expenditure and capital sums exclude revenue-type expenditure or receipts, and any payments subject to tax deduction under sections 237 or 238
• Expenditure is treated as "incurred" on the date the sum becomes payable, not on the date it is actually paid
• For certain tax incentive schemes (hotels, nursing homes, urban renewal, etc.), expenditure qualifies only to the extent it is attributable to work actually carried out within specified periods
• Pre-trading capital expenditure on industrial buildings or machinery/plant is deemed to have been incurred on the first day of trading