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Capital allowances in respect of machinery or plant.
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31.—(1) Section 284 of the Principal Act is amended—
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(a) in subsection (2)—
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(i) in paragraph (a), by substituting “paragraphs (aa) and (ab)” for “paragraph (aa)”,
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(ii) by inserting the following after paragraph (aa):
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“(ab) Where for any chargeable period ending on or after 1 January 2002 a wear and tear allowance would be due to be made to a person in respect of machinery or plant in accordance with paragraph (a), the person may elect that the amount of the wear and tear allowance to be made for that chargeable period and any subsequent chargeable period in respect of each and every item of the machinery or plant concerned shall, subject to subsection (4), instead of being the amount referred to in paragraph (a), be an amount equal to—
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(i) where, apart from this paragraph, the allowance would be made in accordance with paragraph (a)(i), 20 per cent of the amount of the capital expenditure incurred on the provision of that machinery or plant which is still unallowed as at the commencement of the first-mentioned chargeable period, and
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(ii) where, apart from this paragraph, the allowance would be made in accordance with paragraph (a)(ii), 20 per cent of the value of that machinery or plant at the commencement of the first-mentioned chargeable period.
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(ac) An election under paragraph (ab) shall be irrevocable, and shall be included—
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(i) where such an election is made by a chargeable person within the meaning of Part 41, in the return required to be made by that person under section 951 for the first chargeable period, and
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(ii) where such an election is made by any other person, in the annual statement of profits or gains required to be delivered by that person under the Income Tax Acts, for the first year of assessment,
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for which a wear and tear allowance in respect of machinery or plant is to be made in accordance with that paragraph.”,
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and
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(iii) in paragraph (b), by substituting “, the amount specified in paragraph (aa) or, as the case may be, the amount specified in subparagraph (i) or (ii) of paragraph (ab)” for “or the amount specified in paragraph (aa), as the case may be,”,
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and
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(b) in subsection (3), by substituting “For the purposes of paragraphs (a)(ii) and (ab)(ii) of subsection (2), the value at the commencement of a chargeable period” for “For the purposes of subsection (2)(a)(ii), the value at the commencement of the chargeable period”.
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(2) Section 288 of the Principal Act is amended by inserting the following after subsection (3A):
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“(3B) Notwithstanding subsection (3), a balancing charge shall not be made where the amount of the sale, insurance, salvage or compensation moneys received by the person in question in respect of the machinery or plant is less than €2,000; but this subsection shall not apply in the case of the sale or other disposal of the machinery or plant to a connected person.”.
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