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PART XIII
Wear and Tear and Obsolescence
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Wear and tear of machinery, plant, etc.
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241.—(1) Subject to the provisions of this Act, in charging the profits or gains of a trade, profession, employment or office, a deduction may be allowed of a sum equal to five-fourths of the amount considered by the Special Commissioners to be just and reasonable, as representing the diminished value by reason of wear and tear during the year of any machinery or plant used for the purposes of the trade, profession, employment or office and belonging to the person by whom it is carried on or held:
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Provided that where a person is carrying on a trade which consists of or includes the working of a mine or quarry or the smelting of ore, the deduction to be allowed under this subsection in respect of machinery or plant belonging to him and used in connection with the working of the mine or quarry or the smelting of the ore shall, if the person so elects, be such sum as is considered just and reasonable having regard to the period at the expiration of which the mine or quarry is likely to cease to be worked or the smelting of ore is likely to be discontinued and the probable value of the machinery or plant at the expiration of that period to the person carrying on the trade:
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Provided also that the deduction to be allowed under this subsection—
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(a) in respect of a vehicle suitable for the conveyance by road of persons or goods or the haulage by road of other vehicles, or
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(b) by virtue of an election under the first proviso to this subsection,
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shall be computed as if “five-fourths of” in this subsection were deleted.
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(2) Where machinery or plant is let to the person by whom the trade, profession, employment or office is carried on or held, on the terms of his being bound to maintain the same and deliver it over in good condition at the end of the lease, the machinery or plant shall be deemed to belong to that person for the purpose of this section, provided that the burden of the wear and tear of the machinery or plant will in fact fall directly on him.
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(3) Where full effect cannot be given to any such deduction in any year owing to there being no profits or gains chargeable for that year, or owing to the profits or gains chargeable being less than the deduction, the deduction or part of the deduction to which effect has not been given, as the case may be, shall, for the purpose of making the assessment for the following year, be added to the amount of the deduction for wear and tear for that year, and deemed to be part of that deduction, or, if there is no such deduction for that year, be deemed to be the deduction for that year, and so on for succeeding years.
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(4) Any claim in respect of the aforesaid deduction shall be included in the annual statement required to be delivered under this Act of the profits or gains of the trade, profession, employment or office for which the machinery or plant is used, and the inspector, in assessing those profits or gains, shall make such allowance in respect thereof as is due.
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(5) Where machinery or plant is let upon such terms that the burden of the wear and tear thereof falls directly on the lessor, he shall be entitled, on making a claim to the inspector within twelve months after the end of the year of assessment, to an allowance on account of the wear and tear of the machinery or plant equal to the amount which might have been allowed if, during the period of the letting, the machinery or plant were in use for the purposes of a trade, profession, employment or office carried on or held by him.
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(6) No deduction for wear and tear, or repayment on account of any such deduction, shall be allowed for any year if the deduction, when added to—
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(a) the deductions on that account, and
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(b) any initial allowances in relation to the machinery or plant under Chapter I of Part XV,
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allowed for any previous years to the person by whom the trade, profession, employment or office is carried on or held, will make the aggregate amount of the deductions and allowances exceed the actual cost to that person of the machinery or plant, including in that actual cost any expenditure in the nature of capital expenditure on the machinery or plant by way of renewal, improvement, or reinstatement.
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(7) Where, in charging the profits or gains of a trade or profession, a deduction is to be allowed to any person under subsection (1), as representing the diminished value by reason of wear and tear during the year of assessment of any machinery or plant, the value at the commencement of the year of such machinery or plant shall be taken to be the actual cost to that person of such machinery or plant reduced by the total of any deductions allowed on account of wear and tear and any initial allowances made under Chapter I of Part XV for previous years of assessment.
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(8) Where an application is made to the Revenue Commissioners for the alteration of the amount of any deduction for wear and tear, the Revenue Commissioners, unless they are of opinion that the application is frivolous or vexatious, shall refer the case to the Board of Referees, and that Board shall, if they are satisfied that the application is made by or on behalf of any considerable number of persons engaged in or holding any class of trade, business, profession, employment or office take the application into their consideration, and determine the deduction to be allowed.
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In this subsection the expression “Board of Referees” means a Board of Referees to be appointed for the purpose of this subsection by the Minister for Finance.
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