# The Water Reorganisation (Capital Allowances) Order 1989, Note: Explanatory note


(This note is not part of the Order)
Section 2(3) of the Capital Allowances Act 1968 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. The writing-down allowance for a chargeable period is the residue 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 or, in certain cases, 50 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 2 of the 1968 Act the amount that is to be taken as the residue in relation to industrial buildings and structures which vested on the transfer date (1st September 1989), in accordance with schemes made under Schedule 2 to the Water Act 1989, in companies which succeeded the water authorities.
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 or, as the case may be, 50 years.
Article 3 of the Order and Schedule 2 specify the amount of capital expenditure that the successor companies are deemed to have incurred on the transfer date in respect of machinery and plant which vested in them in accordance with Schedule 2 schemes. Those amounts are relevant for the purpose of calculating the capital allowances in respect of machinery and plant for which Chapter I of Part III of the Finance Act 1971 provides.

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Source: https://www.legislation.gov.uk/uksi/1989/2017/note (the official version)
Page: https://openlegislation.uk/water-reorganisation-capital-allowances-order-1989/note
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.