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6 1967

INCOME TAX ACT, 1967

Chapter IV

Dredging: Initial and Annual Allowances

Allowances for expenditure on dredging.

294. —(1) Subject to the provisions of this section, where a person for the purposes of any qualifying trade carried on by him incurs capital expenditure on dredging, and either the trade consists of the maintenance or improvement of the navigation of a harbour, estuary or waterway or the dredging is for the benefit of vessels coming to, leaving or using any dock or other premises occupied by him for the purposes of the trade, then, there shall be made in respect of the expenditure to the person for the time being carrying on the trade—

(a) for the first relevant year of assessment, an initial allowance equal to one-tenth of the expenditure, and

(b) for that and each subsequent year of assessment (until the allowances made under this section in respect of the expenditure equal the amount of the expenditure), an annual allowance equal to one-fiftieth of the expenditure:

Provided that this subsection shall not apply to any expenditure incurred before the 30th day of September, 1956.

(2) If the trade is permanently discontinued in any year of assessment, then, for that year there shall be made to the person last carrying on the trade, in addition to any other allowance made to him, an allowance equal to the amount of the expenditure less the allowances made in respect of it under subsection (1) for that and previous years of assessment.

(3) For the purposes of this section, a trade shall not be treated by virtue of any of the provisions of this Act as discontinued on a change in the persons engaged in carrying it on.

(4) Any allowance under this section shall be made in charging the profits or gains of the trade, and if different persons are charged in respect of the trade for different parts of any year of assessment, any annual allowance for that year shall be apportioned between them in proportion to the length of the periods for which they are so charged, but, if it is the first relevant year of assessment, any initial allowance shall be made to the person first carrying on the trade in the year.

(5) Where expenditure is incurred partly for the purposes of a qualifying trade and partly for other purposes, subsection (1) shall apply to so much only of that expenditure as on a just apportionment ought fairly to be treated as incurred for the purposes of that trade.

(6) In this section “qualifying trade” means any trade or undertaking which, or a part of which, complies with any of the following conditions:

(a) the condition that it consists of the maintenance or improvement of the navigation of a harbour, estuary or waterway,

(b) any condition set out in the provisions of section 255 (1),

but where part only of a trade or undertaking complies with those conditions, subsection (5) shall apply as if the part which does and the part which does not comply were separate trades.

(7) Where a person incurs capital expenditure for the purposes of a trade or part of a trade not yet carried on by him but with a view to carrying it on, or incurs capital expenditure in connection with a dock or other premises not yet occupied by him for the purposes of a qualifying trade but with a view to so occupying the dock or premises, the foregoing provisions of this section shall apply as if he had been carrying on the trade or part of the trade or occupying the dock or premises for the purposes of the qualifying trade, as the case may be, at the time when the expenditure was incurred.

(8) For the purposes of this section, the first relevant year of assessment, in relation to expenditure incurred by any person, is the year in his basis period for which he incurs the expenditure or, in the case of expenditure for which allowances are to be made by virtue of subsection (7), the first year of assessment in his basis period for which he both carries on the trade or part of the trade for the purposes of which the expenditure was incurred and occupies for the purposes of that trade or part of the trade the dock or other premises in connection with which it was incurred.

(9) Where a person contributes a capital sum to expenditure on dredging incurred by another person, he shall, for the purposes of this section, be treated as incurring capital expenditure on that dredging equal to the amount of the contribution and the capital expenditure incurred by the other person on that dredging shall, for those purposes, be deemed to be reduced by the amount of the contribution.

(10) In this section “dredging” does not include things done otherwise than in the interests of navigation, but (subject to that) includes the removal of anything forming part of or projecting from the bed of the sea or of any inland water, by whatever means it is removed and whether or not at the time of removal it is wholly or partly above water; and this section shall apply to the widening of an inland waterway in the interests of navigation as it applies to dredging.

(11) No allowance shall be made by virtue of this section in respect of any expenditure if for the same or any previous or subsequent year of assessment an allowance is or can be made in respect of it under Chapter II of Part XV or Chapter I of this Part.

(12) Notwithstanding any other provision of this section, no allowance under this section shall be made for any year of assessment beginning before the 6th day of April, 1960, but, in determining the allowances to be made under this section in any particular case, there shall be deemed to have been made in that case all such allowances (other than initial allowances) as could have been made if this section had always had effect.