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PART XIV
Beliefs for Certain Expenditure on Scientific Research, on Mining Development and on the Purchase of New Ships
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Chapter I
Allowances for Expenditure on Scientific Research
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Allowance for scientific research.
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244.—(1) In this section—
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the expression “scientific research” means any activities in the fields of natural or applied science for the extension of knowledge;
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the word “asset” includes a part of an asset;
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the expression “expenditure on scientific research” does not include any expenditure incurred in the acquisition of rights in, or arising out of, scientific research.
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(2) Where a person carrying on a trade either—
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(a) incurs, on or after the 6th day of April, 1946, non-capital expenditure on scientific research relating to the trade, or
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(b) pays, on or after that date, any sum to a body carrying on scientific research and approved for the purposes of this section by the Minister for Finance or to an Irish university, in order that such body or university may undertake scientific research relating to the trade,
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then, the expenditure so incurred or the sums so paid shall be deducted as an expense in computing the profits or gains of the trade.
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(3) Where—
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(a) on or after the 6th day of April, 1946, a person incurs capital expenditure on scientific research, and
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(b) either—
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(i) he is then carrying on a trade to which such expenditure relates, or
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(ii) he subsequently sets up and commences a trade which is related to such research, and
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(c) he applies to the inspector for an allowance under this sub-section in respect of the said expenditure, and
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(d) he so applies—
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(i) in case the expenditure was incurred by him while carrying on the trade, within twelve months after the end of the year of assessment in which it was incurred, or
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(ii) in case the expenditure was incurred by him before the setting up and commencement of the trade, within twelve months after the end of the year of assessment in which the trade was set up and commenced,
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then, subject to the provisions of this section, there shall be allowed as a deduction in charging the profits or gains of the trade for the year of assessment mentioned in whichever of subparagraphs (i) and (ii) of paragraph (d) is applicable, and for each of the four following years of assessment, a sum equal to one-fifth of the amount of the expenditure.
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(4) Where an asset, representing capital expenditure on scientific research, ceases at any time from any cause whatever to be used for such research, relating to the trade carried on by the person who incurred the expenditure, then—
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(a) no allowance under this section in respect of that expenditure shall be made for any year of assessment after that in which the cessation takes place;
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(b) if the total of the following, namely, the allowances already made under this section in respect of that expenditure and the value of the asset immediately before the cessation, is less than the said expenditure, there shall be allowed as a deduction in charging the profits or gains of the trade for the year of assessment in which the cessation takes place an additional allowance equal to the amount of the deficiency;
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(c) if the said total exceeds the said expenditure, the amount of the excess or the total of the allowances so made, whichever is the less, shall be treated as a trading receipt of the trade accruing immediately before the cessation;
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(d) in the application of section 241 to a claim in respect of the asset for any year of assessment after that in which the cessation takes place, the actual cost of the asset shall be treated as being reduced by the total of the allowances granted in respect of the asset under this section; and
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(e) in the application of section 243 to any such claim, the cost of the asset shall be treated as being reduced by the said total.
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(5) In relation to capital expenditure on scientific research incurred on or after the 6th day of April, 1965, this section shall have effect—
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(a) as if in subsection (3) the words “and for each of the four following years of assessment,” and “one-fifth of” were omitted,
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(b) as if paragraphs (a), (b) and (e) of subsection (4) were omitted and the following paragraph were substituted for paragraph (c)—
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“(c) an amount equal to the allowance made under this section in respect of that expenditure, or, if the value of the asset immediately before the cessation is less than that allowance, equal to that value, shall be treated as a trading receipt of the trade accruing immediately before the cessation;”,
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(c) as if “the amount of the allowance effectively granted” were substituted for “the total of the allowances granted” in subsection (4) (d).
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(6) Where an allowance under this section is granted to a person for any year of assessment in respect of expenditure represented wholly or partly by assets, then, for that year of assessment—
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(a) no deduction in respect of those assets shall be allowed to that person under section 67, 241, 243 or 306, and
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(b) section 65 (3) shall have effect as regards those assets as if section 65 (4) were omitted.
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(7) Section 241 (3) shall apply in relation to an allowance under subsection (3) of this section as it applies in relation to deductions in respect of wear and tear of plant and machinery.
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(8) For the purposes of this section expenditure shall not be regarded as incurred by a person in so far as it is, or is to be, met directly or indirectly out of moneys provided by the Oireachtas or by any person other than the first-mentioned person.
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(9) The same expenditure shall not be taken into account for any of the purposes of this section in relation to more than one trade.
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