Finance Act, 1987
|
Capital allowances for certain road vehicles. |
24.—(1) (a) In this section— | |
“car” means any mechanically propelled road vehiclebeing a vehicle which has been constructed or adapted to be primarily suited to the carriage of passengers and not to the conveyance of goods or burden of any description or to the haulage by road of other vehicles, and which is a vehicle of a type commonly used as a private vehicle and suitable to be so used, and includes a vehicle in use for the purpose referred to in paragraph (ii) of the definition of “qualifying purposes”; | ||
“chargeable period” and “chargeable period or its basis period” haver, respectively, the meanings assigned to them by paragraph 1 (2) of the First Schedule to the Corporation Tax Act, 1976 ; | ||
“qualifying purposes” means the use, in the ordinary course of trade, of a car for the purposes of— | ||
(i) short-term hire to members of the public, or | ||
(ii) the carriage of members of the public while the car is a licensed public hire vehicle fitted with a taximeter in pursuance of the Road Traffic (Public Service Vehicles) Regulations, 1963 (S.I. No. 191 of 1963); | ||
“short-term hire” means, in relation to a car, the hire of the car to a person under a hire-drive agreement (within the meaning of section 3 of the Road Traffic Act, 1961 ) for a continuous period which does not exceed eight weeks: | ||
Provided that, where a period of hire of a car to a person by another person is followed within seven days of the end of that period by a further period of hire of a car (whether the same car or not) to that person by that other person, the two periods shall be deemed for the purposes of this section, including any subsequent application of this proviso, to constitute together a single continuous period of hire, so that where that continuous period of hire exceeds eight weeks, the period of hire of any car included in that continuous period of hire shall not be treated as a period of short-term hire, and, for the purposes of this proviso, any reference to a person shall be treated as including a reference to any other person who would be regarded as connected with that person under section 16 of the Finance (Miscellaneous Provisions) Act, 1968 ; | ||
“tax” means income tax or corporation tax, as the case may be. | ||
(b) For the purposes of this section, a car shall be regarded as used by a person for qualifying purposes as respects a chargeable period if, and only if, not less than 75 per cent. of its use (determined by reference to the periods of time in which the car is used, or available for use, for any purpose) by that person in the chargeable period or its basis period is for qualifying purposes: | ||
Provided that, where as respects a chargeable period the use of a car for qualifying purposes doesnot satisfy the requirements of this paragraph but would have satisfied those requirements if the reference to “75 per cent.” were a reference to “50 per cent.”, the car shall be deemed to be used for qualifying purposes as respects that chargeable period if the use of the car by that person for qualifying purposes satisfied the requirements of this paragraph as respects the immediately preceding chargeable period, or the car shall be deemed to be so used if the said use of the car has satisfied those requirements as respects the immediately succeeding chargeable period and the inspector shall accordingly adjust the amount of capital allowances falling to be made in taxing the person's trade and any amount of tax overpaid shall be repaid. | ||
(2) In determining what capital allowances fall to be made to a person, for any chargeable period ending on or after the 6th day of April, 1987, in taxing a trade which consists of or includes the carrying on of qualifying purposes, section 241 of the Income Tax Act, 1967 , shall apply to a car which, as respects that period, has been used by the person for qualifying purposes as if— | ||
(a) the reference in subsection (1) of that section to “five-fourths of the amount” were a reference to “twice the amount”, and | ||
(b) the second proviso to the said subsection (1) were deleted. |