Finance Act, 1975

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Amendment of section 22 of Finance Act, 1974.

18.—(1) Section 22 of the Finance Act, 1974 , is hereby amended—

(a) by the substitution for subsection (2) of the following subsections—

“(2) Where a person to whom this section applies incurs, for the purpose of farming farm land occupied by him, any capital expenditure on the construction of farmhouses, farm buildings, cottages, fences or other works, there shall be made, in charging the profits or gains from farming the said farm land, in respect of that expenditure—

(a) for the first relevant year of assessment, an initial allowance equal to one-fifth of that expenditure, and

(b) for the first relevant year of assessment and for each subsequent year of assessment (until the allowances made, or deemed to have been made, under this section in respect of the said expenditure equal the amount of the expenditure as determined in accordance with the provisions of section 29 of the Finance Act, 1975) an allowance (in this section referred to as an annual allowance) equal to one-tenth of that expenditure:

Provided that paragraph (a) shall not apply in respect of expenditure incurred before the 6th day of April, 1974, and paragraph (b) shall not apply in respect of expenditure incurred before the 6th day of April, 1971.

(2A) Where any capital expenditure as aforesaid was incurred by a person on or after the 6th day of April, 1971, and before the 6th day of April, 1974, an annual allowance shall, for the purposes of this section, be deemed—

(a) to have been made to that person, and

(b) to have been set off against chargeable profits or gains for the first relevant year of assessment and for each subsequent year of assessment prior to the year 1974-75, and no such allowance shall be carried forward and set off against profits or gains chargeable for the year 1974-75 or any subsequent year of assessment:

Provided that where the said expenditure was incurred in the year 1973-74, an annual allowance shall, for the purposes of this section, be deemed to have been made and to have been set off against chargeable profits or gains for that year of assessment.

(2B) Where, for any year of assessment, an individual—

(a) elects to be charged to tax, in respect of his profits or gains from farming, by reference to the provisions of section 21, or

(b) is not, by virtue of section 15 (3), chargeable to tax in respect of such profits or gains,

and that year is a year of assessment in respect of which he could, otherwise, have claimed an annual allowance under this section, that allowance shall, for the purposes of this section, be deemed to have been made for that year of assessment and shall not be carried forward and set off against profits or gains chargeable for any subsequent year of assessment.”,

(b) by the substitution, in subsection (3), of “1971” for “1974”, and

(c) by the addition to subsection (5) of “or in what would have been his basis period if his profits or gains from farming had been chargeable to tax under Case I of Schedule D”, and the said subsection (5), as so amended, is set out in the Table to this section.

(2) This section shall be deemed to have come into force and shall have effect as on and from the 6th day of April, 1974.

TABLE

(5) For the purposes of this section, the first relevant year of assessment, in relation to expenditure incurred by any person, is the year in his basis period (within the meaning of section 297 of the Income Tax Act, 1967 ) for which he incurs the expenditure or in what would have been his basis period if his profits or gains from farming had been chargeable to tax under Case I of Schedule D.