First Previous (Chapter VII Offshore Funds) Next (Chapter IX Capital Gains Tax)

10 1990

FINANCE ACT, 1990

Chapter VIII

Capital Allowances

Amendment of section 241 (wear and tear of machinery, plant, etc.) of Income Tax Act, 1967 .

70. Section 241 of the Income Tax Act, 1967 , is hereby amended in relation to machinery or plant provided for use for the purposes of a trade on or after the 1st day of April, 1990, by the insertion in subsection (1), after “chargeable period or its basis period” of “, and which, while used for the purposes of the trade, is wholly and exclusively so used,”.

Amendment of section 11 (wear and tear allowances for certain machinery and plant in undeveloped areas) of Finance Act, 1967 .

71. Section 11 (as amended by section 46 of the Finance Act, 1988 ) of the Finance Act, 1967 , is hereby amended—

(a) by the substitution, for subparagraph (ii) of paragraph (b) of subsection (2), of the following subparagraphs:

“(ii) if the machinery or plant is provided for use on or after the 1st day of April, 1989, and before the 1st day of April, 1991, 50 per cent., or

(iii) if the machinery or plant is provided for use on or after the 1st day of April, 1991, and before the 1st day of April, 1992, 25 per cent.,”,

and

(b) by the insertion after subsection (2) of the following subsection:

“(2A) Notwithstanding subsection (2), no allowance made under section 241 of the Income Tax Act, 1967 , for wear and tear of any qualifying machinery or plant provided for use on or after the 1st day of April, 1992, shall be increased under this section.”.

Amendment of section 26 (increase of wear and tear allowances for certain machinery and plant) of Finance Act, 1971 .

72. Section 26 (as amended by section 47 of the Finance Act, 1988 ) of the Finance Act, 1971 , is hereby amended—

(a) by the substitution, for subparagraph (ii) of paragraph (b) of subsection (2), of the following subparagraphs:

“(ii) if the machinery or plant is provided for use on or after the 1st day of April, 1989, and before the 1st day of April, 1991, 50 per cent., or

(iii) if the machinery or plant is provided for use on or after the 1st day of April, 1991, and before the 1st day of April, 1992, 25 per cent.,”,

and

(b) by the insertion after subsection (2) of the following subsection:

“(2A) Notwithstanding subsection (2), no allowance made under section 241 of the Income Tax Act, 1967 , for wear and tear of any qualifying machinery or plant provided for use on or after the 1st day of April, 1992, shall be increased under this section.”.

Amendment of section 251 (initial allowances for machinery and plant) of Income Tax Act, 1967 .

73. Section 251 of the Income Tax Act, 1967 , is hereby amended—

(a) in relation to capital expenditure incurred on or after the 1st day of April, 1990, by the insertion in subsection (1), after “or the haulage by road of other vehicles,” of “and that machinery or plant, while used for the purposes of that trade, is wholly and exclusively so used,”,

(b) by the insertion in subsection (3) after “1956” of “or on or after the 1st day of April, 1992”, and

(c) by the insertion in subsection (4), after paragraph (bb) (inserted by section 43 of the Finance Act, 1988 ), of the following paragraph:

“(bbb) in relation to capital expenditure incurred on or after the 1st day of April, 1991, and before the 1st day of April, 1992, as if ‘one-quarter’ were substituted for ‘one-fifth’ in subsection (1),”.

Amendment of section 254 (industrial building allowance) of Income Tax Act, 1967 .

74. —Section 254 (as amended by section 21 (1) of the Corporation Tax Act, 1976 ) of the Income Tax Act, 1967 , is hereby amended—

(a) by the insertion in subsection (2A), after paragraph (a), of the following paragraph:

“(aa) in relation to capital expenditure incurred on or after the 1st day of April, 1991, and before the 1st day of April, 1992, on the construction of a building or structure in respect of which an allowance under this Chapter falls to be made by reason of its use for a purpose specified in paragraph (a) or (b) of section 255 (1), as if ‘one-quarter’ were substituted for ‘one-tenth’,”,

(b) by the insertion after subsection (2A) of the following subsection:

“(2B) Notwithstanding any other provision of this section, no industrial building allowance shall be made in respect of capital expenditure incurred on or after the 1st day of April, 1992, on the construction of an industrial building or structure.”,

and

(c) by the insertion after subsection (3) of the following subsection:

“(3A) Where a building or structure which is to be an industrial building or structure forms part of a building or is one of a number of buildings in a single development, or forms part of a building which is itself one of a number of buildings in a single development, there shall be made such apportionment as is necessary of the expenditure incurred on the construction of the whole building or number of buildings, as the case may be, for the purpose of determining the expenditure incurred on the construction of the building or structure which is to be an industrial building or structure and references in this section (including subsection (3)) to a building or structure shall be construed accordingly.”.

Amendment of section 19 (industrial building allowance in relation to buildings and structures bought unused) of Finance Act, 1970 .

75. Section 19 (as amended by section 86 of the Finance Act, 1974 ) of the Finance Act, 1970 , is hereby amended by the insertion after subsection (2) of the following subsection:

“(2A) For the purposes of subsections (1) and (2)—

‘expenditure incurred on the construction of a building or structure’ excludes any expenditure within the meaning of section 256 of the Income Tax Act, 1967 ,

the net price paid’ means the amount represented by A in the equation—

C

A = B ×

______

C + D

where

B is the amount paid by a person on the purchase of the relevant interest in a building or structure;

C is the amount of the expenditure actually incurred on the construction of the building or structure;

D is the amount of any expenditure actually incurred which is expenditure for the purposes of paragraph (a), (b) or (c) of section 256 of the Income Tax Act, 1967 .”.

Amendment of section 25 (increase of writing-down allowances for certain industrial buildings) of Finance Act, 1978 .

76. Section 25 (as amended by section 48 of the Finance Act, 1988 ) of the Finance Act, 1978 , is hereby amended—

(a) by the substitution, for subparagraph (ii) of paragraph (b) of subsection (2), of the following subparagraphs:

“(ii) if the qualifying expenditure is incurred on or after the 1st day of April, 1989, and before the 1st day of April, 1991, 50 per cent., or

(iii) if the qualifying expenditure is incurred on or after the 1st day of April, 1991, and before the 1st day of April, 1992, 25 per cent.,”,

and

(b) by the insertion after subsection (2) of the following subsection:

“(2A) Notwithstanding subsection (2), no allowance made under section 264 of the Income Tax Act, 1967 , in respect of qualifying expenditure incurred on or after the 1st day of April, 1992, shall be increased under this section.”.

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

77. Section 22 of the Finance Act, 1974 , is hereby amended—

(a) by the substitution, for subparagraph (ii) of paragraph (b) of the proviso to subsection (2), of the following subparagraphs:

“(ii) in relation to capital expenditure incurred on or after the 1st day of April, 1989, and before the 1st day of April, 1991, whether claimed in one chargeable period or more than one such period, shall not, in the aggregate, exceed one-half of that capital expenditure, and

(iii) in relation to capital expenditure incurred on or after the 1st day of April, 1991, and before the 1st day of April, 1992, whether claimed in one chargeable period or more than one such period, shall not, in the aggregate, exceed one-quarter of that capital expenditure.”,

and

(b) by the insertion after subsection (2B) of the following subsection:

“(2C) Notwithstanding any other provision of this section, no farm buildings allowance made in relation to capital expenditure incurred on or after the 1st day of April, 1992, shall be increased under this section.”.

Amendment of section 265 (balancing allowances and balancing charges) of Income Tax Act, 1967 .

78. Section 265 (as amended by section 45 of the Finance Act, 1988 ) of the Income Tax Act, 1967 , is hereby amended by the substitution in subsection (1) of “in respect of which an allowance has been made under Chapter II of Part XV or under this Chapter, and any of the following events occurs” for “and any of the following events occurs while the building or structure is an industrial building or structure”.

Amendment of section 276 (machinery or plant used partly for non-trading purposes) of Income Tax Act, 1967 .

79. Section 276 of the Income Tax Act, 1967 , is hereby amended in relation to machinery or plant provided for use for the purposes of a trade on or after the 1st day of April, 1990, by the insertion after “used by that person for the purposes of a trade carried on by him and” of “, while so used, was used wholly and exclusively for that purpose and otherwise”.

Amendment of section 51 (application of certain allowances in relation to certain areas and certain expenditure) of Finance Act, 1988 .

80. Section 51 of the Finance Act, 1988 , is hereby amended by the substitution for subsections (2), (3) and (4) of the following subsections:

“(2) Section 251 (as amended by the Finance Act, 1990) of the Income Tax Act, 1967 , shall have effect in relation to capital expenditure incurred on the provision of machinery or plant to which this section applies as if—

(a) in subsection (3), ‘or on or after the 1st day of April, 1992’ were deleted,

(b) paragraphs (bb) and (bbb) of subsection (4) were deleted,

(c) the following provision were substituted for paragraph (d) of subsection (4):

‘(d) in relation to capital expenditure incurred on or after the 1st day of April, 1971, as if “five-fifth” were substituted for “one-fifth” in subsection (1).’,

and

(d) subsection (7) were deleted.

(3) Section 11 of the Finance Act, 1967 , and section 26 of the Finance Act, 1971 , shall have effect in relation to an allowance which falls to be made under section 241 of the Income Tax Act, 1967 , for wear and tear of any machinery or plant to which this section applies as if—

(a) paragraph (b) of subsection (2) (as amended by the Finance Act, 1990) and subsection (2A) (inserted by the Finance Act, 1990) of the said section 11, and

(b) paragraph (b) of subsection (2) (as amended by the Finance Act, 1990) and subsection (2A) (inserted by the Finance Act, 1990) of the said section 26,

were deleted.

(4) Section 254 of the Income Tax Act, 1967 , and section 25 of the Finance Act, 1978 , shall have effect in relation to capital expenditure on the construction of an industrial building or a premises to which this section applies as if—

(a) paragraph (aa) (inserted by the Finance Act, 1990) of subsection (2A) and subsections (2B) (as so inserted) and (7) (inserted by the Finance Act, 1988 ) of the said section 254, and

(b) paragraph (b) of subsection (2) (as amended by the Finance Act, 1990) and subsection (2A) (inserted by the Finance Act, 1990) of the said section 25,

were deleted.”.

Application of certain allowances in relation to certain expenditure.

81. —(1) This section applies to—

(a) machinery or plant or an industrial building or structure which is provided for the purposes of a project approved for grant assistance by the Industrial Development Authority, the Shannon Free Airport Development Company Limited or Údarás na Gaeltachta on or before the 31st day of December, 1990, and

(b) (i) a building or structure which is to be an industrial building or structure within the meaning of section 255 (1) (d) of the Income Tax Act, 1967 , and which is to be registered in a register kept by Bord Fáilte Éireann under the Tourist Traffic Acts, 1939 to 1987, and

(ii) machinery or plant which is provided for the purposes of a trade or part of a trade of hotel keeping carried on in the said building or structure,

where a binding contract for the provision of the building or structure was entered into before the 31st day of December, 1990:

Provided that this section shall not apply if the said building or structure is not registered, within 6 months after the date of the completion of the said building or structure, in a register kept by Bord Fáilte Éireann under the Tourist Traffic Acts, 1939 to 1987, and where by virtue of this section any allowance or increased allowance has been granted any necessary additional assessments may be made to give effect to this proviso.

(2) Section 251 of the Income Tax Act, 1967 , shall have effect in relation to capital expenditure incurred on the provision of machinery or plant to which this section applies as if—

(a) in subsection (3), “or on or after the 1st day of April, 1992” (inserted by this Act) were deleted,

(b) in subparagraph (ii) of paragraph (bb) (inserted by the Finance Act, 1988 ) of subsection (4), “and before the 1st day of April, 1991,” were deleted, and

(c) paragraph (bbb) (inserted by this Act) of subsection (4) were deleted.

(3) Section 11 of the Finance Act, 1967 , and section 26 of the Finance Act, 1971 , shall have effect in relation to an allowance which falls to be made under section 241 of the Income Tax Act, 1967 , for wear and tear of any machinery or plant to which this section applies as if—

(a) in relation to the said section 11, the provisions of section 71 had not been enacted, and

(b) in relation to the said section 26, the provisions of section 72 had not been enacted.

(4) Section 254 of the Income Tax Act, 1967 , shall have effect in relation to capital expenditure incurred on the construction of a building or structure which is to be an industrial building or structure to which this section applies as if—

(a) the following provision were substituted for paragraph (a) of subsection (2A):

“(a) in relation to capital expenditure incurred on or after the 16th day of January, 1975, on the construction of a building or structure in respect of which an allowance under this Chapter falls to be made by reason of its use for a purpose specified in paragraph (a) or (b) of section 255 (1), as if ‘one-half’ were substituted for ‘one-tenth’, and”,

(b) paragraph (aa) (inserted by this Act) of subsection (2A) were deleted, and

(c) subsection (2B) (inserted by this Act) were deleted.

(5) Section 25 of the Finance Act, 1978 , shall have effect in relation to capital expenditure incurred on the construction of a building or structure which is to be an industrial building or structure to which this section applies as if the provisions of section 76 had not been enacted.