Addition of
ACW accılanan
398. 39C mad 390.
to in subsection (1)b) is impracticable or inequitable, be may direct that the provisions of the sections referred to ta subsection (1)(a) shall apply to the extent and for the dura- tion specified in the direction.".
3. The principal Ordinance is amended by adding, after section 39A, the following—
**Indtil mod Romual
lowoces ON machinery or nbal worder IME poollag system.
(63 of 1989.)
398, (1) Where a person carrying on a trade, profes. sion or business incurs capital expenditure on the provision of machinery or plant for the purposes of producing profit chargeable to tax under Part TV then, except where such expenditure is expenditure of a kind described in section 168(1)(5), 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", equal to one-quarter of such expenditure.
(2) Where during the basis period for any year of assessment or during the basis period for any earlier year of assessment a person owas or bas owned and bus in qne or has had in use any machinery or plant for the purposes of producing profits chargeable to tax under Fart TV, 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 weẾT and tear of such machinery or plant.
(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 plaul shall be the aggregate capital expenditure incurred 00 the provision of the machinery or plant belonging to that class reduced by-
(2) the aggregate of any initial allowances computed in accordance with section 37 in respect of any machinery or plaat belonging to that classy,
(5) the aggregate of any annual allowances computed in accordance with section 37 in respect of any machinery or plaut 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 be- longing to that class; and
(A) any reducing value of machinery or plant excluded from the total reducing value of a class of machinery or plant under section 390(3).
(5) Where, prior to the commencement of the Inland Revenue (Amendment) (No. 4) Ordinance 1980, any machinery or plant has been the subject of a balancing allowance or balancing charge computed in accordance with section 38, such machinery or plant shall, for the purposes
Pooling Empleon. When BOI LO Apply.
(63 μ¢ 1980.)
3
of subsection (4), ba excluded from the class of machinery or plant.
tax
(6) Where any machinery or plant is owned and used by a person for any period immediately before he uses it for the purposes of producing profits chargeable to under Pärt TV, the capital expenditure incurred on the provision of the machinery or plant for the purposes of subsection (4) shall be computed by deducting from the actual cost the notional amount of the annual allowances which would have been made under section 37 to the owner if since acquiring the machinery or plant he had used it for the purpose of producing profits chargeable to tax under Part IV.
(7) If a person succeeds to any trade, profession or business which immediately before the succession-
(a) was carried on by another person; and
(b) the machinery or plant that was used at any time by that ather person for the purpose of producing profite chargeable to tax under Part IV is not sold in the successor,
the reducing value of auch machinery or plant shall, for the purpose of computing annual allowances under subsection (3), be taken to be the reducing value thereof still unallowed to that other person as at the time of succession.
(8) Notwithstanding subsection (7), op initial allownoce shall be made under this Part by virtue of subsection (7)
(9) No annual allowance shall be made where the reductions made under subsection (4) exceed the aggregale capital expenditure incurred on the provision of the class of machinery or plant.
(10) Nothing in subsection (2) shall apply in respect of any machinery or plant owned and 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 charge- able to tax under Part IV for any year of assessment.
(11) The Commissioner may in his discretion allow a higher rate of depreciation in respect of any class of machinery or plant than that prescribed by the Board of Inland Revenge.
39C (1) The provisions of this Part which applied immediately prior to the commencement of the Taland Revenue (Amendment) (No. 4) Ordinance 1980 shall continue to apply-
(a) subject to subsection (2), in respect of machinery
or plant to which section 37A applies;
(b) in respect of machinery or plant to which section
39A applies.
(2) Where, pursuant to the terms and conditions of a bire purchase agreement, machinery or plant to which