Citation, commencement and interpretation

1.-(1) This Order may be cited as the AEA Technology plc (Capital Allowances) Order 1996 and shall come into force on 1st September 1996.

(2) In this Order:

(a)"the Act" means the Atomic Energy Authority Act 1995;

(b)"the 1988 Act" means the Income and Corporation Taxes Act 1988(2);

(c)"the 1990 Act" means the Capital Allowances Act 1990(3);

(d)"the Company" means the successor company registered by the name of AEA Technology plc and with the company registration number 3095862;

(e)"the Transfer Date" means 31st March 1996, being the date on which the Transfer Scheme came into force;

(f)"the Transfer Scheme" means the scheme made by the United Kingdom Atomic Energy Authority on 7th March 1996 pursuant to section 1(1) of the Act and to a direction given by the Secretary of State dated 12th February 1996; and

(g)"use" means use in any trade in which the assets in question are, have been, or are to be used on or after the Transfer Date.

Writing-down allowances - industrial buildings and structures

2.-(1) The amount specified in column (2) of Schedule 1 to this Order shall be taken, for the purposes of subsection (3) of section 3 of the 1990 Act (writing-down allowances in respect of expenditure on industrial buildings and structures), as the residue on the Transfer Date of expenditure in relation to which the property vested in the Company in accordance with the Transfer Scheme and described in column (1) of Schedule 1 to this Order is the relevant interest for the purposes of that section.

(2) The period specified in column (3) of Schedule 1 to this Order shall be treated, for the purposes of subsection (3) of section 3 of the 1990 Act, and in relation to the property vested and described as mentioned in paragraph (1), as the part of the period of 25 years which is unexpired on the Transfer Date.

Writing-down allowances-machinery and plant

3.-(1) In this article:

(a)"relevant plant and machinery" means the plant and machinery (including motor cars and fixtures), which are vested in the Company in accordance with the Transfer Scheme and described in column (1) of the relevant Part of Schedule 2 to this Order, and which, by virtue of paragraph 16 of Schedule 3 to the Act, are to be treated as if they had been acquired by the Company for the purposes for which they are, or have been, used by the Company on or after the Transfer Date; and

(b)"the relevant Part" means, with respect to motor cars of a value exceeding £12,000, Part I, and with respect to other plant and machinery, Part II.

(2) The amount of capital expenditure which, for the purposes of Part II of the 1990 Act (capital allowances in respect of machinery and plant), the Company shall be treated as having incurred on the Transfer Date in respect of relevant plant and machinery shall be the amount specified in column (2) of the relevant Part of Schedule 2 to this Order.

Scientific research

4. In respect of the vesting in the Company in accordance with the Transfer Scheme of the assets representing allowable scientific research expenditure which are described in column (1) of Schedule 3 to this Order, the amount of capital expenditure which the Company shall be treated, for the purposes of Part VII of the 1990 Act (scientific research), as having incurred on the Transfer Date on scientific research shall be the amount specified in column (2) of Schedule 3 to this Order.

Allowances for expenditure on purchase of patent rights

5. The amount of capital expenditure which, for the purposes of section 520 of the 1988 Act (allowances for expenditure on purchase of patent rights), the Company shall be treated as having incurred on the Transfer Date, on the purchase for its use of the patents which are vested in the Company in accordance with the Transfer Scheme, shall be nil.

Know-how

6. The amount of capital expenditure which, for the purposes of section 530 of the 1988 Act (disposal of know-how), the Company shall be treated as having incurred on the Transfer Date, on the acquisition for its use of the know-how which is vested in the Company in accordance with the Transfer Scheme, shall be nil.

Article 2

SCHEDULE 1WRITING DOWN ALLOWANCES - INDUSTRIAL BUILDINGS AND STRUCTURES

Article 3

SCHEDULE 2WRITING DOWN ALLOWANCES - MACHINERY AND PLANT

PART 1MOTOR CARS

PART IIOTHER MACHINERY AND PLANT

Article 4

SCHEDULE 3SCIENTIFIC RESEARCH

Explanatory Note

(This note is not part of the Order)

This Order makes provision determining certain writing-down allowances and capital allowances available to AEA Technology plc ("the Company"), being the successor to certain of the property, rights and liabilities of the United Kingdom Atomic Energy Authority ("the Authority") by virtue of a scheme ("the Transfer Scheme") made by the United Kingdom Atomic Energy Authority on 7th March 1996 pursuant to section 1(1) of the Atomic Energy Authority Act 1995("the Act") and to a direction given by the Secretary of State under section 2(1) of the Act dated 12th February 1996.

Section 3(3) of the Capital Allowances Act 1990 ("the 1990 Act") provides for the calculation of the writing-down allowance in respect of a period which ends after the sale of the relevant interest in an industrial building or structure by reference to the residue of certain expenditure. In the case of expenditure incurred on or after 6th November 1962, the writing-down allowance for a chargeable period is the residue of the expenditure in question reduced in the proportion which the length of the chargeable period bears to the unexpired part, at the date of sale, of the period of 25 years beginning with the date on which the building or structure was first used.

Article 2(1) of this Order and Schedule 1 specify for the purposes of section 3(3) of the 1990 Act the amount that is to be taken as the residue in relation to industrial buildings and structures which vested in the Company on the transfer date (31st March 1996), in accordance with the Transfer Scheme.

Article 2(2) and Schedule 1 specify in relation to those buildings and structures the period which is to be treated as the unexpired part of the period of 25 years.

Article 3 of the Order and Schedule 2 specify the amount of capital expenditure that the Company is deemed to have incurred on the transfer date in respect of the machinery and plant (including motor cars and fixtures) which vested in it in accordance with the Transfer Scheme. These amounts are relevant for the purposes of calculating the capital allowances in respect of machinery and plant for which Part II of the 1990 Act provides.

Article 4 of the Order and Schedule 3 specify the amount of capital expenditure that the Company is deemed, for the purposes of Part VII of the 1990 Act, to have incurred on the transfer date on scientific research , in respect of the vesting in the Company of assets representing expenditure of a capital nature which was incurred by the Authority on scientific research directly undertaken by the Authority or on their behalf.

Articles 5 and 6 of the Order prescribe the amount of capital expenditure which, for the purposes of section 520 and 530 of the Income and Corporation Taxes Act 1988, the Company shall be treated as having incurred on the transfer date on the acquisition of (respectively) the patent rights and know-how which vested in the Company in accordance with the Transfer Scheme. The expenditure of the Authority on the patent rights and know-how in question was of a revenue rather than a capital nature, and the amount prescribed in each case is therefore nil.