Finance Act, 1990

Capital allowances: transitional provisions.

21.—(1) In this section—

“basis period for the year 1990-91” has the meaning assigned to it by section 16 ;

“basis period for the year 1989-90” means the period on the profits or gains of which income tax for the year 1989-90 falls to be finally computed for the purposes of Case I or II of Schedule D in accordance with the provisions (as if this Act had not been enacted) of Chapter II of Part IV of the Income Tax Act, 1967 ;

“intervening period” means the period beginning immediately after the end of the basis period for the year 1989-90 and ending immediately before the commencement of the basis period for the year 1990-91;

“relevant expenditure” means capital expenditure incurred by a person—

(a) on the provision, for the purposes of a trade or profession, of machinery or plant,

(b) for the purposes of a trade of farming farmland occupied by him, on the construction of farm buildings (excluding a building or part of a building used as a dwelling), fences, roadways, holding yards, drains or land reclamation or other works, or

(c) on the construction of a building or structure which is, or is to be, an industrial building or structure for the purposes of Chapter II of Part XV (as amended by section 34 of the Finance Act, 1975 ) of the Income Tax Act, 1967 .

(2) Notwithstanding any other provision of the Tax Acts, where a person has incurred relevant expenditure to which this subsection applies then, as respects that expenditure—

(a) allowances shall not be made under sections 251 (as amended by this Act) and 254 (as amended by this Act) of the Income Tax Act, 1967 ,

(b) an allowance which falls to be made under section 241 (as amended by this Act) of the Income Tax Act, 1967 , shall not be increased under section 11 (as amended by this Act) of the Finance Act, 1967 , or section 26 (as amended by this Act) of the Finance Act, 1971 ,

(c) an allowance which falls to be made under section 22 (as amended by this Act) of the Finance Act, 1974 , shall not be increased under the proviso to subsection (2) of that section, and

(d) an allowance which falls to be made under section 264 (as amended by section 50 of the Finance Act, 1988 ) of the Income Tax Act, 1967 , shall not be increased under section 25 (as amended by this Act) of the Finance Act, 1978 .

(3) Subsection (2) applies to relevant expenditure incurred by a person in the intervening period.

(4) Subsection (3) shall not have effect in relation to a person where he so elects, by giving notice in writing to the inspector with the return for the year 1990-91 which is required under section 10 of the Finance Act, 1988 .

(5) Where a person makes an election under subsection (4), the provisions of subsection (2) shall apply to relevant expenditure incurred by the person in the basis period for the year 1990-91.