Inland Revenue
[CAP. 112
85
Provided that the Commissioner may in his discretion allow a higher rate than that prescribed by the Board of Inland Revenue.
(4) Nothing in subsection (2) shall apply in respect of any machinery or plant used by a person for the purposes of his trade or business where such machinery or plant represents scientific research expenditure of a capital nature which pursuant to section 16B(1)(b) has been allowed as a deduction in ascertaining the profits from such trade or business in respect of which such person is chargeable to tax under Part IV for any year of assessment. (Added 35 of 1965 s. 20)
(Added 36 of 1955 s. 43)
38. Balancing allowances and charges, machinery or plant
(1) Where any of the following events occurs in the case of any machinery or plant in respect of which an initial allowance or an annual allowance has been made for any year of assessment to a person carrying on a trade, profession or business, that is to say, either- (Amended 30 of 1950 Schedule)
(a) the machinery or plant is sold, whether while still in use or not; or
(b) the machinery or plant is destroyed; or
(c) the machinery or plant is put out of use as being worn out or obsolete or otherwise useless or no longer required,
and the event in question occurs either whilst the person is carrying on his trade, profession or business or at the time when he ceases so to do, an allowance or charge, to be known as a "balancing allowance" or a "balancing charge", shall in the circumstances mentioned in this section, be made to or, as the case may be, on that person for the year of assessment in his basis period for which that event occurs. (Amended 36 of 1955 s. 44)
(2) Where there are no sale, insurance, salvage or compensation moneys or where the amount of the capital expenditure of the person in question on the provision of the plant or machinery still unallowed as at the time of the event exceeds those moneys, a balancing allowance shall be made, and the amount thereof shall be the amount of the expenditure still unallowed as aforesaid or, as the case may be, the excess thereof over the said moneys; but in a case where an annual allowance has been computed on the cost of the asset as determined in accordance with section 37(2A), the cost of the asset as computed in accordance with that subsection shall be deemed to be the capital expenditure for the purposes of this subsection and in a case where an annual allowance has been computed in accordance with section 37(4), the reduced value used for the purpose of that subsection shall be deemed to be the capital expenditure for the purposes of this subsection. (Amended 26 of 1969 s. 21; 2 of 1971 s. 29)
(3) If the sale, insurance, salvage or compensation moneys exceed the amount, if any, of the said expenditure still unallowed as at the time of the event, a balancing charge shall be made.