1947-HKRS28-8-14_Part02 — Page 15

Industrial

Buildings and

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that sale, shall be computed by reference to the residual value of that expenditure immediately after the sale and shall be the fraction of the suid residue the numerator of which is one and the denominator of which is the number of years of assessment comprised in the period which-

(1) begins with the first year of assessment for which the buyer is entitled to an annual állowance or would be so entitled if the building or structure bad at all material times continued to be an industrial building or structure; and

(ii) ends with the fiftieth year of assessment after that in which the building or structure was first used; and so on for any subsequent sales.

(e) Notwithstanding anything in the preceding provisions of this section in no case shall the amount of an annual allowance made to a person for any year of assessment in respect of any expenditure exceed what, apart from the writing off falling to be made by reason of the making of that allowance, would be the residue of that expenditure at the end of his basis period for that year of assessment.

Raloneing

36. (1) Where any capital expenditure has been Allowances and charges, incurred on the construction of a building or structure and, in or after the basis period for the year of assessment 1947/48, any of the following events occurs while the building or structure is an industrial building or structure, that is to say- (a) the relevant interest in the building or structure is sold; or

Storduren,

(6) that interest, being a leasehold interest, comes to an end otherwise than on the person entitled thereto acquiring the interest which is reversionary thereon; or

(c) the building or structure is demolished or destroyed or, without being demolished or destroyed, ceases altogether to be used,

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 the person entitled to the relevant interest immediately before that event recurs for the year of assessment in his basis period for which that event occurs.

Provided that no balancing allowance or balancing charge shall be made to or on any person for any year of assessment by reason of any event occurring after the end of his basis period for the fiftieth year of assessment after that in which the building or structure was first used.

(2) Where there are no sale, insurance, salvage or compensation moneys, or where the residue of the expenditure immediately before the event exceeds those moneys, a balanc- ing allowance shall be made and the amount thereof shall be the amount of the said residue or, as the case may be, of the excess thereof over the said moneys.

(3) If the sale, insurance, salvage or compensation moneys exceed the residue. if any, of the expenditure immediately before the event, a balancing charge shall be made and the amount on which it is made shall be an amount equal to the excess or, where the residue is nil, to the said moneys.

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(4) Notwithstanding anything in the last preceding sub- section, in no case shall the amount on which a balancing charge is made on a person exceed the aggregata of the follow- ing amounts, that is to say-

(4) the amount of the initial allowance, if any, made to him in respect of the expenditure in question;

(b) the amount of the annual allowances, if any, made

to him in respect of the expenditure in question.

37. In this Chapter-

(1) An "industrial building or structure" means a build- ing or structure in uso~~-

(i) for the purposes of a trade carried on in a mill. factory or other similar premises; or

(ii) for the purposes of a transport, dock, water or electricity undertaking: or

(iii) for the purposes of a trade which consist in the manufacture of goods or materials or the subjection of goods or materials to any procesa; or

(iv) for the purpose of a trade which consists in the storage of goods or materials which are to be used in the manufacture of other goods or to be subjected, in the course of a trade, to any procese; or

(v) for the purpose of a trade which consists of the storage of goods or materials on their arrival by sen or air into the Colony:

and, in particular, the said expression includes any building or structure provided by the person carrying on sach a trade or undertaking for the welfare of workers employed in that trade or undertaking and in use for that purpose.

Provided that notwithstanding anything in the foregoing the expression industrial building or structure" does not include any building or structure in use as, or as part of, a dwelling house, retail shop, showroom, hotel or office or to any purpose ancillary to the purposes of a dwelling house, retail shop, showroom, hotel or office

(2) The "relevant interest" means, in relation to any expenditure incurred on the construction of a building or structure the interest in that building or structure to which the person who incurred the expenditure was entitled when he incurred it.

(3) The "residue of expenditure" shall be the amount of the capital expenditure incurred in the construction of a building or structure reduced by-

(the amount of any initial allowance made; anıl (H) any annual allowance made, and

(ii) any balancing allowances granted;

and increased by any balancing charges made.

For the purpose of computing the residue of expenditure there shall be written off an amount of one-fiftieth of the expenditure in respect of any year of assessment in which no initial or annual allowance falls to be made.

Dubaitions.