HC Deb 10 February 1994 vol 237 cc382-3W
Mr. Burns

To ask Mr. Chancellor of the Exchequer if he will make a statement about the availability of capital allowances for enterprise zone buildings brought into use two years ago.

Mr. Dorrell

Under section 10B of the Capital Allowances Act 1990, capital allowances at the 100 peer cent. enterprise zone rate remain available for a period of two years after a building is brought into use, so long as the building was brought into use on or after 16 December 1991.

As announced on 13 January, Official Report, column 249, the Government will be bringing forward legislation during the Committee stage of the Finance Bill to amend a defect in the capital allowances legislation as it affects long leases given in return for a capital sum. The. Government are conscious that, until the legislation is published, there will inevitably be some uncertainty for investors about the detailed conditions under which capital allowances will be available. In cases where entitlement to capital allowances under section 10B's two-year rule was shortly to expire at the time of the announcement, this uncertainty may have had the effect of preventing some investors from making a claim under the rule. That is clearly an unfair situation in which to place such investors.

Accordingly, we propose to bring forward a provision in the Committee of the Finance Bill which will give until 31 August 1994 for qualifying expenditure to fall within the section 10B rule. This will apply to cases where, under this section, the two-year period would have expired on or after 13 January 1994 and not later than 31 August 1994.