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14 1982

FINANCE ACT, 1982

Chapter II

Taxation of Farming Profits

Farming: provision relating to relief in respect of increase in stock values.

13. —(1) Where, in computing profits from the trade of farming for an accounting period, a deduction allowed by virtue of section 12 of the Finance Act, 1976 , has effect for the year 1982-83—

(a) section 31 (4) (a) of the Finance Act, 1975 (as applied by section 12 (2) (a) of the Finance Act, 1976 ), shall apply and have effect as if “less 20 per cent, of its trading profits for that period” were deleted,

(b) the said section 12 shall have effect as if subsection (2) (c) (inserted by the Finance Act, 1979 ) had not been enacted, and

(c) the amount of the said deduction shall, subject to the provisions of subparagraph (i) of the said section 31 (4) (a), be eleven-tenths of the amount of the deduction for that accounting period computed in accordance with paragraphs (a) and (b) of this subsection.

(2) Where a deduction falls to be made under subsection (2) of section 31A (inserted by the Finance Act, 1976 ) of the Finance Act, 1975 , in relation to the trade of farming for an accounting period which ends on or after the 6th day of April, 1981, the amount of the said deduction shall, subject to the provisions of subsection (4) (a) (i) of the said section 31A, be eleven-tenths of the amount which would otherwise be the amount of the deduction.

(3) Where this section has had effect in computing the profits of a trade of farming for an accounting period and a decrease in stock value is, in accordance with section 31A (7) of the Finance Act, 1975 , or section 12 (5) of the Finance Act, 1976 , to be treated as a trading receipt of that trade of farming for a subsequent accounting period, the amount of the said decrease shall, for the purpose of ascertaining the amount to be so treated, be deemed to be an amount equal to eleven-tenths of that decrease:

Provided that the amount by which a decrease in stock value for an accounting period is to be increased under this subsection shall not exceed the amount determined by the formula—

(A − B) − (C − D)

where:

A is the aggregate amount of the deductions, in respect of which either subsection (1) (c) or subsection (2), as may be appropriate, had effect and as increased under that subsection, which were made in computing the profits of the trade of farming for preceding accounting periods,

B is the aggregate amount of the deductions included in A before they were increased under the provisions of either subsection (1) (c) or subsection (2),

C is the aggregate amount of the decreases in trading stock, in respect of which this subsection had effect and as increased under this subsection, which were treated as trading receipts of the trade of farming for preceding accounting periods, and

D is the aggregate amount of the decreases included in C before they were increased under the provisions of this subsection.

Amendment of section 477 (time for payment of tax) of Income Tax Act, 1967.

14. Section 477 of the Income Tax Act, 1967 , shall have effect as if in subsection (2) (inserted by the Finance Act, 1980 )—

(a) “1982-83” were substituted for “1980-81” in paragraph (a), and

(b) “1982” were substituted for “1980”, and “1983” were substituted for “1981”, in each place where they occur, in paragraph (b).

Amendment of section 21A (credit for rates) of Finance Act, 1974.

15. —As respects assessments for the year 1982-83, section 21A (inserted by the Finance Act, 1978 ) of the Finance Act, 1974 , shall apply as if the following paragraphs were substituted for paragraphs (a) and (b) of subsection (1):

“(a) the amount of tax so chargeable for the year 1982-83 shall be reduced by one-half of the rates payable for the local financial year preceding that year of assessment;

(b) in computing the said profits or gains for the year 1982-83, the sum to be deducted in respect of the rates payable for the local financial year preceding that year of assessment shall not exceed one-half of the sum which, but for this paragraph, would be so deducted and, apart from the first-mentioned sum, no other sum shall be deducted in respect of rates:”.

Amendment of section 22 (farming: allowances for capital expenditure on construction of building and other works) of Finance Act, 1974.

16. Section 22 (inserted by the Corporation Tax Act, 1976 ) of the Finance Act, 1974 , is hereby amended, as respects any capital expenditure incurred on or after the 6th day of April, 1982—

(a) by the substitution, for subsection (2), of the following subsection:

“(2) Where a person to whom this section applies incurs, for the purpose of a trade of farming land occupied by him, any capital expenditure on the construction of farm buildings (excluding a building or part of a building used as a dwelling), fences or other works, there shall be made to him during a writing-down period of ten years beginning with the chargeable period related to that expenditure, writing-down allowances (in this section referred to as ‘farm buildings allowances’) in respect of that expenditure and such allowances shall be made in taxing the trade:

Provided that—

(a) the farm buildings allowance to be granted for any chargeable period shall, subject to paragraph (b), be increased by such amount as is specified by the person to whom the allowance is to be made in making his claim for the allowance and, in relation to a case in which this proviso has had effect, any reference in the Tax Acts to a farm buildings allowance made under this section shall be construed as a reference to that allowance as increased under this proviso, and

(b) the maximum farm buildings allowance to be made under this section for any chargeable period shall not exceed three-tenths of the capital expenditure to which the said farm buildings allowance relates.”,

and

(b) by the deletion of subsection (4).