A person who is entitled to a FYA or a WDA for a chargeable period may give a notice to postpone all or part of that allowance. The notice must be given within these time limits:
Income tax - on or before the first anniversary of
31 January following the year of assessment in which the chargeable
period for which the election is made ends.
Corporation tax - no later than 2 years after the
end of the chargeable period for which the election is made.
The notice must specify the amount postponed.
When an allowance is postponed for a chargeable period it is
not made for that chargeable period but allowances for future
chargeable periods are calculated as if it had been made so that
future allowances are calculated by reference to the reduced pool
balance.
Once all or part of an allowance has been postponed the
person who postponed it may claim all or part of the amount
postponed in a future chargeable period provided that the person is
still carrying on the qualifying activity. A postponed allowance
may not be claimed after the qualifying activity for which the ship
was acquired has ceased. When a postponed allowance is claimed it
is made as well as any other WDA claimed for the chargeable period.
A postponed allowance is not treated as an allowance brought
forward for the purposes of the group relief legislation in
ICTA88/S403ZB.
Example The Pilgrims partnership buys the
Mayflower for £1,000,000 on 4 July 2003 to use in their
qualifying activity. They draw up accounts to 31 December each
year. They claim the WDA of £250,000 (= 25% of
£1,000,000) for the year ended 31 December 2003 but postpone
£150,000 of it. The pool carried forward at 31 December 2003
is £750,000 (qualifying expenditure £1,000,000 less WDA
claimed £250,000). They can claim all or part of that
£150,000 postponed in any year in which they still carry on
the qualifying activity in addition to the WDA claimed for the
year.
