CHAPTER 4

Miscellaneous and general

304. —(1) This section and section 305 shall apply as respects allowances and charges which are to be made under this Part as it applies for the purposes of income tax.

(2) Any claim by a person for an allowance under this Part in charging profits or gains of any description shall be included in the annual statement required to be delivered under the Income Tax Acts of those profits or gains, and the allowance shall be made as a deduction in charging those profits or gains.

(3) (a) A claim for an industrial building allowance under section 271 shall be accompanied by a certificate signed by the claimant (which shall be deemed to form part of the claim) stating that the expenditure was incurred on the construction of an industrial building or structure and giving such particulars as show that the allowance is to be made.

(b) A claim for an initial allowance under section 283 shall be accompanied by a certificate signed by the claimant (which shall be deemed to form part of the claim) stating that the expenditure was incurred on new machinery or new plant and giving such particulars as show that the allowance is to be made.

(4) Subject to section 278 (2), where full effect cannot be given in any year to any allowance to be made under this Part in taxing a trade owing to there being no profits or gains chargeable for that year, or owing to the profits or gains chargeable being less than the allowance, then, the allowance or part of the allowance to which effect has not been given, as the case may be, shall, for the purpose of making the assessment to income tax for the following year, be added to the amount of the allowances to be made under this Part in taxing the trade for that following year, and be deemed to be part of those allowances, or, if there is no such allowance for that following year, be deemed to be the allowance for that following year, and so on for succeeding years.

(5) Any charge to be made under this Part on a person for any chargeable period in taxing the person's trade or in charging the person's income under Case V of Schedule D shall be made by means of an assessment in addition to any other assessment to be made on the person for that period.

(6) (a) The preceding provisions of this section (other than subsection (3)) shall apply in relation to professions, employments and offices as they apply in relation to trades.

(b) Subsection (3)(b) shall, with any necessary modifications, apply in relation to professions as it applies in relation to trades.

305. —(1) (a) Where under this Part an allowance is to be made to a person for any year of assessment which is to be given by means of discharge or repayment of tax, and is to be available or available primarily against a specified class of income, the amount of the allowance shall be deducted from or set off against the person's income of that class for that year of assessment and, if the amount to be allowed is greater than the amount of the person's income of that class for that year of assessment, the balance shall be deducted from or set off against the person's income of that class for the next year of assessment, and so on for subsequent years of assessment, and tax shall be discharged or repaid accordingly.

(b) Notwithstanding paragraph (a), where an allowance referred to in that paragraph is available primarily against income of the specified class and the amount of the allowance is greater than the amount of the person's income of that class for the first-mentioned year of assessment, the person may, by notice in writing given to the inspector not later than 2 years after the end of the year of assessment, elect that the excess shall be deducted from or set off against the person's other income for that year of assessment, and it shall be deducted from or set off against that income and tax shall be discharged or repaid accordingly and only the excess, if any, of the amount of the allowance over all the person's income for that year of assessment shall be deducted from or set off against the person's income of the specified class for succeeding years.

(2) Any claim for an allowance mentioned in subsection (1) shall be made to and determined by the inspector, but any person aggrieved by any decision of the inspector on any such claim may, on giving notice in writing to the inspector within 21 days after the notification to that person of the decision, appeal to the Appeal Commissioners.

(3) The Appeal Commissioners shall hear and determine an appeal to them under subsection (2) as if it were an appeal against an assessment to income tax, and the provisions of the Income Tax Acts relating to the rehearing of an appeal and to the statement of a case for the opinion of the High Court on a point of law shall, with the necessary modifications, apply accordingly.

(4) Where any person, for the purpose of obtaining for that person or any other person any relief from or repayment of tax in respect of an allowance mentioned in subsection (1), knowingly makes any false statement or false representation, that person shall be liable to a penalty of £500.

306. —(1) In this Part, as it applies for income tax purposes, “basis period” has the meaning assigned to it by this section.

(2) (a) Subject to paragraph (b), in the case of a person to whom an allowance or on whom a charge is to be made under Case I of Schedule D in charging the profits or gains of the person's trade or under Case V of Schedule D in charging income arising from rents or receipts in respect of premises or easements, the person's basis period for any year of assessment shall be the period on the profits or gains of which income tax for that year is to be finally computed under Case I of Schedule D in respect of the trade in question or, as the case may be, under Case V of Schedule D in respect of the income arising from rents or receipts in respect of premises or easements or, where by virtue of the Income Tax Acts the profits or gains or income of any other period are to be taken to be the profits or gains or income of that period, that other period.

(b) In the case of any trade—

(i) where 2 basis periods overlap, the period common to both shall be deemed for the purpose of this subsection to fall in the first basis period only,

(ii) where there is an interval between the end of the basis period for one year of assessment and the basis period for the next year of assessment, then, unless the second-mentioned year of assessment is the year of the permanent discontinuance of the trade, the interval shall be deemed to be part of the second basis period, and

(iii) where there is an interval between the end of the basis period for the year of assessment preceding that in which the trade is permanently discontinued and the basis period for the year in which the permanent discontinuance occurs, the interval shall be deemed to form part of the first basis period.

(3) (a) Any reference in subsection (2)(b) to the overlapping of 2 periods shall be construed as including a reference to the coincidence of 2 periods or to the inclusion of one period in another, and references to the period common to both of 2 periods shall be construed accordingly.

(b) Any reference in subsection (2)(b) to the permanent discontinuance of a trade shall be construed as including a reference to the occurring of any event which under the Income Tax Acts is to be treated as equivalent to the permanent discontinuance of a trade.

(4) Where an allowance or charge is to be made under Chapter 2 of this Part to or on a person carrying on or holding a profession, employment or office, subsections (1) to (3) shall apply as if the references to a trade included references to a profession, employment or office and as if the references to Case I of Schedule D included references to Case II of Schedule D and Schedule E.

(5) In the case of any other person to whom an allowance or on whom a charge is to be made under this Part, that other person's basis period for any year of assessment shall be the year of assessment itself.

307. —(1) In computing for the purposes of corporation tax a company's profits for any accounting period, there shall be made in accordance with this section and section 308 all such deductions and additions as are required to give effect to the provisions of the Tax Acts which relate to allowances (including investment allowances) and charges in respect of capital expenditure, and subsection (2) and section 308 shall apply as respects allowances and charges which are to be made under those provisions as they apply for the purposes of corporation tax.

(2) (a) Allowances and charges to be made for any accounting period in taxing a trade shall be given effect by treating the amount of any allowance as a trading expense of the trade in that period and by treating the amount on which any such charge is to be made as a trading receipt of the trade in that period.

(b) (i) A company to which an industrial building allowance under section 271 , an initial allowance under section 283 or an initial allowance under section 303 (1)(a) is to be made in taxing a trade for any accounting period may disclaim the allowance by notice in writing given to the inspector not later than 2 years after the end of that period.

(ii) Any such notice shall be accompanied by a certificate signed by the person by whom the notice is given giving such particulars as show that the allowance would be made if no such notice were given and the amount which would be so made.

(iii) Where notice is given under subparagraph (i) for any accounting period, the inspector may make an assessment to corporation tax on the company for that accounting period on the amount or the further amount which in the inspector's opinion ought to be charged.

308. —(1) Where an allowance is to be made to a company for any accounting period which is to be given by discharge or repayment of tax or in charging its income under Case V of Schedule D, and is to be available primarily against a specified class of income, it shall, as far as may be, be given effect by deducting the amount of the allowance from any income of the period, being income of the specified class.

(2) Balancing charges for any accounting period which are not to be made in taxing a trade shall, notwithstanding any provision for them to be made under Case IV or V of Schedule D, as the case may be, be given effect by treating the amount on which the charge is to be made as income of the same class as that against which the corresponding allowances are available or primarily available.

(3) Where an allowance which is to be made for any accounting period by means of discharge or repayment of tax, or in charging income under Case V of Schedule D, as the case may be, cannot be given full effect under subsection (1) in that period by reason of a want or deficiency of income of the relevant class, then, so long as the company remains within the charge to corporation tax, the amount unallowed shall be carried forward to the succeeding accounting period, except in so far as effect is given to it under subsection (4), and the amount so carried forward shall be treated for the purposes of this section, including any further application of this subsection, as the amount of a corresponding allowance for that period.

(4) Where an allowance (other than an allowance carried forward from an earlier accounting period) which is to be made for any accounting period by means of discharge or repayment of tax, or in charging income under Case V of Schedule D, as the case may be, and which is available primarily against income of a specified class cannot be given full effect under subsection (1) in that period by reason of a want or deficiency of income of that class, the company may claim that effect shall be given to the allowance against the profits (of whatever description) of that accounting period and, if the company was then within the charge to corporation tax, of preceding accounting periods ending within the time specified in subsection (5), and, subject to that subsection and to any relief for earlier allowances or for losses, the profits of any of those accounting periods shall then be treated as reduced by the amount unallowed under subsection (1), or by so much of that amount as cannot be given effect under this subsection against profits of a later accounting period.

(5) The time referred to in subsection (4) is a time immediately preceding the accounting period first mentioned in subsection (4) equal in length to the accounting period for which the allowance is to be made; but the amount or aggregate amount of the reduction which may be made under that subsection in the profits of an accounting period falling partly before that time shall not, with the amount of any reduction to be made in those profits under any corresponding provision of the Corporation Tax Acts relating to losses, exceed a part of those profits proportionate to the part of the period falling within that time.

(6) A claim under subsection (4) shall be made by notice in writing given to the inspector not later that 2 years from the end of the accounting period in which an allowance cannot be given full effect under subsection (1).

309. —Where a company not resident in the State is within the charge to corporation tax in respect of one source of income and to income tax in respect of another source, then, in applying—

(a) this Part,

(b) section 374 ,

(c) sections 658 and 660 ,

(d) sections 670 and 672 to 678 ,

(e) sections 764 and 765 ,

(f) section 769 , and

(g) any other provision of the Tax Acts relating to the making of allowances or charges under or in accordance with the provisions referred to in paragraphs (a) to (f),

allowances relating to any source of income shall be given effect against income chargeable to the same tax as is chargeable on income from that source.

310. —(1) In this section—

“approved scheme” means a scheme undertaken by a local authority with the approval of the Minister for the Environment and Local Government which has as its object or among its objects the treatment of trade effluents;

“trade effluents” means liquid or other matter discharged into public sewers from premises occupied for the purposes of a trade.

(2) Where a person, for the purposes of a trade carried on or to be carried on by the person, contributes a capital sum to expenditure by a local authority on the provision of an asset to be used for the purposes of an approved scheme, in so far as the scheme relates to the treatment of trade effluents, then, such allowances, if any, shall be made to the person under section 271 , 272 , 283 or 284 as would have been made to the person if the contribution had been expenditure on the provision for the purposes of that trade of a similar asset and that asset had continued at all material times to be in use for the purposes of the trade.

(3) The following provisions shall apply in relation to a transfer of a trade or part of a trade for the purposes of which a contribution referred to in subsection (2) was made:

(a) where the transfer is of the whole trade, allowances which, if the transfer had not taken place, would have been made to the transferor under section 272 or 284 for chargeable periods ending after the date of the transfer shall be made to the transferee and shall not be made to the transferor;

(b) where the transfer is of part only of the trade, paragraph (a) shall apply in relation to so much of the allowance as is properly referable to the part of the trade transferred.

311. —(1) (a) Any reference in this Part to the sale of any property includes a reference to the sale of that property together with any other property and, where property is sold together with other property, so much of the net proceeds of the sale of the whole property as on a just apportionment is properly attributable to the first-mentioned property shall for the purposes of this Part be deemed to be the net proceeds of the sale of the first-mentioned property, and references to expenditure incurred on the provision or the purchase of property shall be construed accordingly.

(b) For the purposes of this subsection, all the property which is sold in pursuance of one bargain shall be deemed to be sold together, notwithstanding that separate prices are, or purport to be, agreed for separate items of that property or that there are, or purport to be, separate sales of separate items of that property.

(2) Subsection (1) shall, with the necessary modifications, apply in relation to other sale, insurance, salvage or compensation moneys as it applies in relation to the net proceeds of sales.

(3) This Part shall apply as if any reference in this Part to the sale of any property included a reference to the exchange of any property and, in the case of a leasehold interest, also included a reference to the surrender of that interest for valuable consideration, and any provisions of this Part referring to the sales shall apply accordingly with the necessary modifications and in particular with the modifications that references to the net proceeds of sale and to the price shall be taken to include references to the consideration for the exchange or surrender, and references to capital sums included in the price shall be taken to include references to so much of the consideration as would have been a capital sum if the consideration had taken the form of a money payment.

(4) This section shall, with the necessary modifications, apply in relation to Chapter 1 of Part 24 and sections 764 and 765 as if that Chapter and those sections were contained in this Part.

312. —(1) In this section, “control”, in relation to a body corporate, means the power of a person to secure—

(a) by means of the holding of shares or the possession of voting power in or in relation to that or any other body corporate, or

(b) by virtue of any powers conferred by the articles of association or other document regulating that or any other body corporate,

that the affairs of the first-mentioned body corporate are conducted in accordance with the wishes of that person and, in relation to a partnership, means the right to a share of more than 50 per cent of the assets, or of more than 50 per cent of the income, of the partnership.

(2) (a) This section shall apply in relation to sales of any property where either—

(i) the buyer is a body of persons over whom the seller has control, or the seller is a body of persons over whom the buyer has control, or both the seller and the buyer are bodies of persons and some other person has control over both of them, or

(ii) it appears with respect to the sale, or with respect to transactions of which the sale is one, that the sole or main benefit which apart from this section might have been expected to accrue to the parties or any of them was the obtaining of an allowance under this Part or under Chapter 1 of Part 24 or section 764 or 765 .

(b) References in this subsection to a body of persons include references to a partnership.

(3) Where the property is sold at a price other than the price it would have fetched if sold in the open market, then, subject to subsections (4) and (5), the like consequences shall ensue for the purposes of the enactments mentioned in subsection (2), in their application to the tax of all persons concerned, as would have ensued if the property had been sold for the price it would have fetched if sold in the open market.

(4) (a) Subject to paragraph (b), where the sale is a sale of machinery or plant—

(i) no initial allowance shall be made to the buyer, and

(ii) subject to subsection (5), if the price which the property would have fetched if sold in the open market is greater than the amount which, for the purpose of determining whether any, and if so, what, balancing charge should be made on the seller in respect of the property under Chapter 2 of this Part, would be taken to be the amount of the capital expenditure incurred by the seller on the provision of the property, subsection (3) shall apply as if for each of the references to the price which the property would have fetched if sold in the open market there were substituted a reference to that amount.

(b) This subsection shall not apply in relation to a sale of machinery or plant which was never used if the business or part of the business of the seller was the manufacture or supply of machinery or plant of that class and the sale was effected in the ordinary course of the seller's business.

(5) (a) Subject to subsection (6), where the sale is one to which subsection (2)(a)(i) applies and subsection (2)(a)(ii) does not apply, and the parties to the sale by notice in writing to the inspector so elect, the following provisions shall apply:

(i) subsection (3) shall apply as if for each of the references to the price which the property would have fetched if sold in the open market there were substituted a reference to that price or to the sum mentioned in paragraph (b), whichever is the lower;

(ii) subsection (4)(a)(ii) shall not apply;

(iii) notwithstanding anything in the preceding provisions of this section, such balancing charge, if any, shall be made on the buyer on any event occurring after the date of the sale as would have been made on the seller if the seller had continued to own the property and had done all such things and been allowed all such allowances or deductions in connection with the property as were done by or allowed to the buyer.

(b) The sum referred to in paragraph (a)(i) is—

(i) in the case of an industrial building or structure, the residue of the expenditure on the construction of that building or structure immediately before the sale, computed in accordance with section 277 , and

(ii) in the case of machinery or plant, the amount of the expenditure on the provision of the machinery or plant still unallowed immediately before the sale, computed in accordance with section 292 .

(6) (a) An election under subsection (5)(a) may not be made if—

(i) any of the parties to the sale is not resident in the State at the time of the sale, and

(ii) the circumstances are not at that time such that an allowance or charge under this Part is to be or might be made to or on that party in consequence of the sale.

(b) Except where referred to in paragraph (a), this section shall apply in relation to a sale notwithstanding that it is not fully applicable by reason of the non-residence of a party to the sale or otherwise.

313. —(1) Where a person succeeds to any trade or profession which until that time was carried on by another person and by virtue of section 69 the trade or profession is to be treated as discontinued, any property which, immediately before the succession takes place, was in use for the purposes of the discontinued trade or profession and without being sold is, immediately after the succession takes place, in use for the purposes of the new trade or profession shall for the purposes of this Part be treated as if it had been sold to the successor when the succession takes place and as if the net proceeds of that sale had been the price which that property would have fetched if sold in the open market.

(2) Where, after the setting up and before the permanent discontinuance of a trade or profession which at any time is carried on in partnership anything is done for the purposes of that trade or profession, any allowance or charge which, if the trade or profession had at all times been carried on by one and the same person, would have been made to or on that person under this Part shall, subject to section 1010 , be made to or on the person or persons from time to time carrying on that trade or profession (in this subsection referred to as “the relevant person or persons”), and the amount of any such allowance or charge shall be computed as if the relevant person or persons had at all times been carrying on the trade or profession and as if everything done to or by the predecessors of the relevant person or persons in the carrying on of that trade or profession had been done to or by the relevant person or persons.

(3) In relation to machinery or plant, this section shall apply subject to Chapter 2 of this Part in so far as that Chapter relates to balancing allowances and balancing charges.

314. —(1) Where under or by virtue of this Part any sum is to be apportioned and at the time of the apportionment it appears that it is material as respects the liability to tax (for whatever chargeable period) of 2 or more persons, any question which arises as to the manner in which the sum is to be apportioned shall be determined, for the purposes of the tax of all those persons, by the Appeal Commissioners in the like manner as if it were an appeal against an assessment to income tax under Schedule D, and the provisions of the Income Tax Acts relating to such an appeal shall apply accordingly with any necessary modifications, and all those persons shall be entitled to appear and be heard by the Appeal Commissioners or to make representations to them in writing.

(2) This section shall apply in relation to any determination for the purposes of this Part of the price which property would have fetched if sold in the open market as it applies in relation to apportionments.

315. —(1) Where an event occurs which gives rise, or would but for this section give rise, to a balancing allowance or balancing charge in respect of any property to or on a company in relation to which a certificate under section 374 (2) of the Income Tax Act, 1967 , or section 70 (2) of the Corporation Tax Act, 1976 , has been given, then, whether the certificate is still in force or not, this section shall apply.

(2) Where the property has been used by the company exclusively for the purposes of its exempted trading operations within the meaning of Chapter I of Part XXV of the Income Tax Act, 1967 , or Part V of the Corporation Tax Act, 1976 , no balancing allowance or balancing charge shall be made.

(3) Where the property has been used partly for the purposes of the company's exempted trading operations and partly for the purposes of its other trading operations, regard shall be had to all the relevant circumstances of the case and there shall be made to or on the company an allowance of such an amount, or, as the case may be, a charge on such an amount, as may be just and reasonable.

316. —(1) References in this Part to capital expenditure and capital sums—

(a) in relation to the person incurring the expenditure or paying the sums, do not include any expenditure or sum allowed to be deducted in computing for the purposes of tax the profits or gains of a trade, profession, office or employment carried on or held by that person, and

(b) in relation to the person receiving the amounts expended or the sums in question, do not include references to any amounts or sums which are to be taken into account as receipts in computing the profits or gains of any trade, profession, office or employment carried on or held by that person,

and do not include, in relation to any person referred to in paragraphs (a) and (b), any expenditure or sum in the case of which a deduction of tax is to be or may be made under section 237 or 238 .

(2) Any reference in this Part to the date on which expenditure is incurred shall be construed as a reference to the date when the sums in question become payable; but, for the purposes of section 284 , this subsection shall apply only in respect of machinery and plant provided for use for the purposes of a trade on or after the 6th day of April 1996.

(3) For the purposes of sections 271 and 283 , any expenditure incurred for the purposes of a trade by a person about to carry on the trade shall be treated as if it had been incurred by that person on the first day on which that person carries on the trade.

317. —(1) In this section—

“food processing trade” means a trade which consists of or includes the manufacture of processed food;

“processed food” means goods manufactured in the State in the course of a trade by a company, being goods which—

(a) are intended for human consumption as a food, and

(b) have been manufactured by a process involving the use of machinery or plant whereby the goods produced by the application of that process differ substantially in form and value from the materials to which the process has been applied and whereby, without prejudice to the generality of the foregoing, the process does not consist primarily of—

(i) the acceleration, retardation, alteration or application of a natural process, or

(ii) the application of methods of preservation, pasteurisation or any similar treatment;

“qualifying machinery or plant” means machinery or plant used solely in the course of a process of manufacture whereby processed food is produced.

(2) Subject to subsection (3), expenditure shall not be regarded for any of the purposes of this Part, other than sections 283 and 284 , as having been incurred by a person in so far as the expenditure has been or is to be met directly or indirectly—

(a) in relation to expenditure incurred before the 6th day of May, 1993, by the State, by any board established by statute or by any public or local authority, and

(b) in relation to expenditure incurred on or after the 6th day of May, 1993, by the State or by any person other than the first-mentioned person.

(3) (a) Subject to paragraph (b) and subsection (4), where an allowance is to be made for the purposes of income tax or corporation tax, as the case may be, under section 283 or 284 and the capital expenditure incurred on the provision of the machinery or plant in respect of which the allowance is to be made was incurred on or after the 29th day of January, 1986, the following provisions shall apply:

(i) expenditure shall not be regarded as having been incurred by a person in so far as the expenditure has been or is to be met directly or indirectly—

(I) in relation to expenditure incurred before the 6th day of May, 1993, by the State, by any board established by statute or by any public or local authority, and

(II) in relation to expenditure incurred on or after the 6th day of May, 1993, by the State or by any person other than the first-mentioned person, and

(ii) the actual cost of any machinery or plant to any person shall for the purposes of section 284 be taken to be the amount of capital expenditure incurred on the provision of such machinery or plant less any expenditure referred to in subparagraph (i).

(b) Paragraph (a) shall not apply in relation to any capital expenditure which is met or is to be met in the manner mentioned in paragraph (a)(i)—

(i) under the terms of an agreement finally approved on or before the 29th day of January, 1986, by a Department of State, any board established by statute or any public or local authority, or

(ii) under the terms of an agreement which—

(I) was the subject of negotiations which were in progress on the 29th day of January, 1986, with a Department of State, any board established by statute or any public or local authority, and

(II) was finally approved by such Department, board or authority not later than the 31st day of December, 1986.

(4) (a) Subsection (3) shall not apply where an allowance is to be made under section 283 or 284 in taxing a food processing trade carried on by a company and the capital expenditure in respect of which the allowance is to be made was incurred by that company and was so incurred in respect of qualifying machinery or plant.

(b) The reference in paragraph (a) to expenditure incurred by a company shall not include any expenditure which it is deemed to have incurred in accordance with section 299 .

318. —In this Part, except where the context otherwise requires, “sale, insurance, salvage or compensation moneys”, in relation to an event which gives rise or might give rise to a balancing allowance or a balancing charge to or on any person, means—

(a) where the event is a sale of any property, including the sale of a right to use or otherwise deal in machinery or plant consisting of computer software, the net proceeds to that person of the sale,

(b) where the event is the demolition or destruction of any property, the net amount received by that person for the remains of the property, together with any insurance moneys received by that person in respect of the demolition or destruction and any other compensation of any description received by that person in respect of the demolition or destruction, in so far as that compensation consists of capital sums,

(c) as respects machinery or plant, where the event is the permanent loss of the machinery or plant otherwise than in consequence of its demolition or destruction, any insurance moneys received by that person in respect of any loss and any other compensation of any description received by that person in respect of that loss, in so far as that compensation consists of capital sums, and

(d) where the event is that a building or structure ceases altogether to be used, any compensation of any description received by that person in respect of that event, in so far as that compensation consists of capital sums.

319. —(1) In computing any deduction, allowance or relief for the purposes of—

(a) this Part,

(b) sections 658 and 659 ,

(c) Chapter 1 of Part 24 , or

(d) sections 764 , 765 and 769 ,

the cost to a person of any machinery or plant, or the amount of any expenditure incurred by a person, shall not take account of any amount included in such cost or expenditure for value-added tax in respect of which the person may claim—

(i) a deduction under section 12 of the Value-Added Tax Act, 1972 , or

(ii) a refund of value-added tax under an order under section 20(3) of that Act.

(2) In calculating for the purposes of this Part the amount of sale, insurance, salvage or compensation moneys to be taken into account in computing a balancing allowance or balancing charge to be made to or on a person, no account shall be taken of the amount of value-added tax (if any) chargeable to the person in respect of those moneys.

320. —(1) In this Part, except where the context otherwise requires—

“income” includes any amount on which a charge to tax is authorised to be made under this Part;

“lease” includes an agreement for a lease where the term to be covered by the lease has begun, and any tenancy, but does not include a mortgage, and “lessee”, “lessor” and “leasehold interest” shall be construed accordingly.

(2) Any reference in this Part to any building, structure, machinery or plant shall be construed as including a reference to a part of any building, structure, machinery or plant except, in relation to a building or structure, where the reference is comprised in a reference to the whole of a building or structure.

(3) This Part shall apply in relation to a share in machinery or plant as it applies in relation to a part of machinery or plant and, for the purposes of this Part, a share in machinery or plant shall be deemed to be used for the purposes of a trade only so long as the machinery or plant is used for the purposes of the trade.

(4) Any reference in this Part to the time of any sale shall be construed as a reference to the time of completion or the time when possession is given, whichever is the earlier.

(5) Any reference in this Part to the setting up or permanent discontinuance of a trade includes, except where the contrary is expressly provided, a reference to the occurring of any event which under any provision of the Income Tax Acts is to be treated as equivalent to the setting up or permanent discontinuance of a trade.

(6) Any reference in this Part to an allowance made includes a reference to an allowance which would be made but for an insufficiency of profits or gains, or other income, against which to make the allowance.

321. —(1) Subsections (2) to (7) shall apply for the interpretation of—

(a) this Part,

(b) section 374 ,

(c) sections 658 to 660 ,

(d) Chapter 1 of Part 24 ,

(e) sections 764 and 765 ,

(f) section 769 , and

(g) any other provision of the Tax Acts relating to the making of allowances or charges under or in accordance with the provisions referred to in paragraphs (a) to (f).

(2) “Chargeable period” means an accounting period of a company or a year of assessment, and—

(a) a reference to a chargeable period or its basis period is a reference to the chargeable period if it is an accounting period and to the basis period for it if it is a year of assessment;

(b) a reference to a chargeable period related to expenditure, or a sale or other event, is a reference to the chargeable period in which, or to that in the basis period for which, the expenditure is incurred or the sale or other event takes place, and means the latter only if the chargeable period is a year of assessment.

(3) References to tax for a chargeable period shall be construed in relation to corporation tax as referring to the tax for any financial year which is chargeable in respect of that period.

(4) A reference to allowances or charges being made in taxing a trade is a reference to their being made in computing the trading income for corporation tax or in charging the profits or gains of the trade to income tax.

(5) (a) Where it is provided that writing-down allowances shall be made in respect of any expenditure during a writing-down period of a specified length, there shall for any chargeable period wholly or partly comprised in the writing-down period be made an allowance equal to the appropriate fraction of the expenditure and, subject to any provision to the contrary, the appropriate fraction shall be such fraction of the writing-down period as falls within the chargeable period.

(b) Notwithstanding paragraph (a), the aggregate amount of the writing-down allowances made, whether to the same or to different persons, together with the amount of any initial allowance (but not of any investment allowance), shall not exceed the amount of the expenditure.

(6) Where the reference is partly to years of assessment before the year 1976-77—

(a) a writing-down allowance includes an annual allowance, and

(b) an allowance on account of wear and tear of machinery or plant includes a deduction on account of wear and tear of machinery or plant,

in the sense which in the context those expressions had immediately before the commencement of the Corporation Tax Act, 1976 .

(7) Where any enactment referred to in subsection (1) provides for an amount of a writing-down allowance or an allowance on account of wear and tear of machinery or plant to be determined by a fraction or percentage, specified numerically, of any expenditure or other sum, or by reference to a percentage determined or deemed to be determined for a chargeable period of one year, then for a chargeable period of less than a year the fraction or percentage shall be proportionately reduced.

(8) Except where the context otherwise requires, in any provision of the Income Tax Acts not referred to in subsection (1) any reference to an allowance or charge for a year of assessment under a provision referred to in that subsection shall include the like allowance or charge for an accounting period of a company, and any reference to the making of an allowance or charge in charging profits or gains of a trade shall be construed as a reference to making the allowance in taxing a trade.

(9) Any provision of the Income Tax Acts whereby, for the purposes of—

(a) this Part,

(b) section 670 ,

(c) section 764 or 765 ,

(d) section 769 , or

(e) any provision of the Income Tax Acts relating to the making of allowances or charges under or in accordance with the provisions referred to in paragraphs (a) to (d),

a trade is or is not to be treated as permanently discontinued or a new trade as set up and commenced shall apply in the like manner in the case of a trade so treated by virtue of the Corporation Tax Acts.