Finance Act, 2000

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Amendment of Part 9 (principal provisions relating to relief for capital expenditure) of Principal Act.

40.—Part 9 of the Principal Act is amended—

(a) in section 278(2), by the deletion of “and, where it is so made, section 304(4) shall not apply”,

(b) in section 300—

(i) in subsection (1), by the substitution of “section 284(6) or 298” for “section 298”, and

(ii) by the insertion of the following subsection after subsection (3)—

“(4) Any wear and tear allowance made to any person under or by virtue of section 284(6) shall be made in charging that person's income under Case V of Schedule D.”,

(c) in section 304—

(i) in subsection (1) by the deletion of “as it applies”,

(ii) in subsection (4)—

(I) by the deletion of “Subject to section 278(2),”,

(II) by the insertion of “, or in charging profits or gains of any description, as the case may be,” after “in taxing a trade”, and

(III) by the insertion of “or in charging the profits or gains, as the case may be,” after “in taxing the trade”,

and

(iii) in subsection (6) by the insertion of the following paragraph after paragraph (b):

“(c) Subsection (4) shall not apply as respects an allowance given by means of discharge or repayment of tax or in charging income under Case V of Schedule D.”,

(d) in section 305(1)—

(i) in paragraph (a) by the insertion of “or in charging income under Case V of Schedule D” after “discharge or repayment of tax”, and

(ii) by the substitution of the following for paragraph (b):

“(b) (i) Notwithstanding paragraph (a), where an allowance referred to in that paragraph is available primarily against income of the specified class and the amount of the allowance is greater than the amount of the person's income of that class for the first-mentioned year of assessment (after deducting or setting off any allowances for earlier years), then the person may, by notice in writing given to the inspector not later than 2 years after the end of the year of assessment, elect that the excess shall be deducted from or set off—

(I) in the case of an individual—

(A) against the individual's other income for that year of assessment, or

(B) where the individual, or, being a husband or wife, the individual's spouse, is assessed to tax in accordance with section 1017, firstly, against the individual's other income for that year of assessment and, subsequently, against the income of the individual's husband or wife, as the case may be, for that year of assessment,

(II) in the case of a person other than an individual, against the person's other income for that year of assessment.

(ii) Where an election is made in accordance with subparagraph (i), the excess shall be deducted from or set off against the income referred to in subclause (A) or (B) of clause (I) or in clause (II), as the case may be, and tax shall be discharged or repaid accordingly and only the balance, if any, of the amount of the excess over all the income referred to in subclause (A) or (B) of clause (I) or in clause (II), as the case may be, for that year of assessment shall be deducted from or set off against the person's income of the specified class for succeeding years.”,

(e) in section 405(1) by the substitution of the following for paragraph (a):

“(a) sections 305(1)(b), 308(4) and 420(2) shall not apply as respects that allowance, and”,

and

(f) by the substitution of the following section for section 406: