Finance Act, 1991

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Amendment of section 19 (industrial building allowance in relation to buildings and structures bought unused) of Finance Act, 1970.

23.— Section 19 (as amended by section 75 of the Finance Act, 1990 ) of the Finance Act, 1970 , is hereby amended—

(a) in subsection (1), by the substitution for “the relevant interest therein is sold” of “or within a period of one year after it commences to be used, the relevant interest therein is sold, then, provided that an allowance has not been claimed by any other person in respect of the said building or structure under Chapter II of Part XV or Chapter I of Part XVI of the Income Tax Act, 1967 ,”,

(b) in the proviso to subsection (1), by the substitution for “is used” of “is used or within the said period”, and

(c) in subsection (2)—

(i) by the substitution for “used, he” of “used, or within a period of one year after it commences to be used, he”,

(ii) by the deletion of “paragraph (b) of”,

(iii) by the substitution for paragraph (a) of the following:

“(a) if that sale is the only sale of the relevant interest before the building or structure is used or within the said period, the said subsection (1) shall have effect as if, in paragraph (b), ‘the said expenditure or to’ and ‘whichever is the less’ were omitted, and”,

and

(iv) in paragraph (b), by the substitution for “used” of “used or within the said period” and the substitution for “paragraph (b)” of “subsection (1)”,

and the said subsection (1) (including the proviso) and subsection (2), as so amended, are set out in the Table to this section.

TABLE

(1) Where expenditure is incurred on the construction of a building or structure and, before that building or structure is used, or within a period of one year after it commences to be used, the relevant interest therein is sold, then, provided an allowance has not been claimed by any other person in respect of the said building or structure under either Chapter II of Part XV or Chapter I of Part XVI of the Income Tax Act, 1967 —

(a) the expenditure actually incurred on the construction thereof shall be left out of account for the purposes of sections 254 , 264 , 265 and 266 of the Income Tax Act, 1967 ; but

(b) the person who buys that interest shall be deemed for those purposes to have incurred, on the date when the purchase price becomes payable, expenditure on the construction thereof equal to the said expenditure or to the net price paid by him for the said interest, whichever is the less:

Provided that, where the relevant interest in the building or structure is sold more than once before the building or structure is used or within the said period, the provisions of paragraph (b) shall have effect only in relation to the last of those sales.

(2) Where the expenditure incurred on the construction of a building or structure was incurred by a person carrying on a trade which consists, as to the whole or any part thereof, in the construction of buildings or structures with a view to their sale, and, before the building or structure is used, or within a period of one year after it commences to be used, he sells the relevant interest therein in the course of that trade, or, as the case may be, of that part of that trade, subsection (1) shall have effect subject to the following modifications—

(a) if that sale is the only sale of the relevant interest before the building or structure is used or within the said period, the said subsection (1) shall have effect as if, in paragraph (b), “the said expenditure or to” and “whichever is the less” were omitted, and

(b) if there is more than one sale of the relevant interest before the building or structure is used or within the said period, the said subsection (1) shall have effect as if the reference to the expenditure actually incurred on the construction of the building or structure were a reference to the price paid on the said sale.