1989 Ed.]
Inland Revenue
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89
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producing profits chargeable to tax under Part IV then, except where such expenditure is expenditure of a kind described in section 16B(1)(b), there shall be made to him, for the year of assessment in the basis period for which the expenditure is incurred, an allowance, to be known as an "initial allowance". (Amended 32 of 1981 s. 6)
(1A) For the purposes of subsection (1), the initial allowance shall be equal to the following percentages of the expenditure referred to in that subsection-
(a) for the year of assessment commencing on 1 April 1980, 35%;
(b) for the year of assessment commencing on 1 April 1981 and all subsequent years of assessment up to and including the year of assessment commencing on 1 April 1988, 55%; (Replaced 29 of 1982 s. 10. Amended 17 of 1989 s. 9)
(c) for any year of assessment commencing on or after 1 April 1989, 60%. (Added 17 of 1989 s. 9)
(2) Where during the basis period for any year of assessment or during the basis period for any earlier year of assessment a person owns or has owned and has in use or has had in use any machinery or plant for the purposes of producing profits chargeable to tax under Part IV, there shall be made to him in respect of each class of machinery or plant for that year of assessment an allowance, to be known as an "annual allowance", for depreciation by wear and tear of such machinery or plant. (Amended L.N. 262 of 1985)
(3) The annual allowance shall be calculated at the rates of depreciation prescribed by the Board of Inland Revenue and shall be computed on the reducing value of each class of machinery or plant.
(4) Subject to subsections (5), (6) and (7), the reducing value of a class of machinery or plant shall be the aggregate capital expenditure incurred on the provision of the machinery or plant belonging to that class reduced by-
(a) the aggregate of any initial allowances computed in accordance with section 37 in respect of any machinery or plant belonging to that class;
(b) the aggregate of any annual allowances computed in accordance with section 37 in respect of any machinery or plant belonging to that class;
(c) the aggregate of any initial allowances computed in accordance with this section in respect of any machinery or plant belonging to that class;
(d) any annual allowance computed in accordance with this section;
(e) any sale, insurance, salvage or compensation moneys received in respect of any machinery or plant belonging to that class; and
(f) any reducing value of machinery or plant excluded from the total reducing value of a class of machinery or plant under section 39C(3).
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