Words in s. 124(1) substituted (27.7.1993 with effect as mentioned in s. 114(2) of the amending Act) by 1993 c. 34, s. 114, Sch. 12 para. 2(1)(a)

Words in s. 124(1)(b) substituted (27.7.1993 with effect as mentioned in s. 114(2) of the amending Act) by 1993 c. 34, s. 114, Sch. 12 para. 2(1)(b)

Words in s. 124(2) substituted (27.7.1993 with effect as mentioned in s. 114(2) of the amending Act) by 1993 c. 34, s. 114, Sch. 12 para. 2(2)

Ss. 124A, 124B inserted (27.7.1993 with effect as mentioned in s. 114(2) of the amending Act) by 1993 c. 34, s. 114, Sch. 12 para.3

Ss. 124A, 124B inserted (27.7.1993 with effect as mentioned in s. 114(2) of the amending Act) by 1993 c. 34, s. 114, Sch. 12 para.3

Words in s. 126(1) substituted (27.7.1993 with effect as mentioned in s. 114(2) of the amending Act) by 1993 c. 34, s. 114, Sch. 12 para. 4(1)

S. 126(2) substituted (27.7.1993 with effect as mentioned in s. 114(2) of the amending Act) by 1993 c. 34, s. 114, Sch. 12 para. 4(2)

Words in s. 126(6) inserted (27.7.1993 with effect as mentioned in s. 114(2) of the amending Act) by 1993 c. 34, s. 114, Sch. 12 para. 4(3)

S. 127(3A)(3B) inserted (27.7.1993 with effect as mentioned in s. 114(2) of the amending Act) by 1993 c. 34, s. 114, Sch. 12 para. 5(1)

Words in s. 127(4) substituted (27.7.1993 with effect as mentioned in s. 114(2) of the amending Act) by 1993 c. 34, 114, Sch. 12 para. 5(2)

S. 127A inserted (27.7.1993 with effect as mentioned in s. 114(2) of the amending Act) by 1993 c. 34, s. 114, Sch. 12 para.6

Words in s. 128(1)(2) substituted (27.7.1993 with effect as mentioned in s. 114(2) of the amending Act) by 1993 c. 34, s. 114, Sch. 12 para. 7(1)(2)

Words in s. 128(3) inserted (27.7.1993 with effect as mentioned in s. 114(2) of the amending Act) by 1993 c. 34, s. 114, Sch. 12 para. 7(3)

Words in s. 128(6) substituted (27.7.1993 with effect as mentioned in s. 114(2) of the amending Act) by 1993 c. 34, s. 114, Sch. 12 para. 7(4)

Words in s. 129(1) substituted (27.7.1993 with effect as mentioned in s. 114(2) of the amending Act) by 1993 c. 34, s. 114, Sch. 12 para.8

S. 129(2) modified (for the year of assessment 1988-1989) by S.I. 1991/851, regs. 1, 9, Sch. 2.

S. 129(2) modified (for the year of assessment 1989-1990) by S.I. 1992/511, regs. 1, 9, Sch. 2.

S. 129(2) applied (with modifications) (for the year of assessment 1990–91) by S.I. 1993/415, reg. 9, Sch. 2

S. 129(2) modified (for the year of assessment 1991-92) by The Lloyds Underwriters (Tax) (1991-92) Regulations 1994 (S.I. 1994/728), regs. 1(1), 9, Sch. 2

Words in Act repealed (with effect in accordance with s. 211(2) of the amending Act) by Finance Act 1994 (c. 9), s. 213(1), Sch. 26 Pt. 5(24)

S. 129(2) modified (19.9.1994) by Coal Industry Act 1994 (c. 21), s. 68(4), Sch. 4 para. 20(5); S.I. 1994/2189, art. 2, Sch.

http://www.legislation.gov.uk/ukpga/1990/1/part/V/chapter/I/1994-09-19Capital Allowances Act 1990 (repealed)An Act to consolidate certain enactments relating to capital allowances.1990-03-19texttext/xmlenStatute Law Database2024-05-17Expert Participation1994-09-19Part V Agricultural Buildings etc.Chapter I Agriculture
122 Allowances for expenditure incurred before 1st April 1986.1

Subject to the provisions of this section, where the owner or tenant of any agricultural land has, before 1st April 1986 or, if it is expenditure under an existing contract, before 1st April 1987, incurred any capital expenditure on the construction of farmhouses, farm buildings, cottages, fences or other works, there shall be made to him during a writing-down period of 8 years beginning with the chargeable period related to the incurring of that expenditure, writing-down allowances of an aggregate amount equal to four-fifths of that expenditure.

2

In any case where by virtue of subsection (3A) of section 68 of the 1968 Act the aggregate amount of allowances and the period during which allowances may be made under paragraph (b) of subsection (1) of that section (and accordingly also under subsection (1) above) are increased, the amount of the allowances and the period during which they may be made under subsection (1) above shall be similarly increased.

3

Where a person would, if he continued to be the owner or, as the case may be, the tenant of any land, be entitled under this section to a writing-down allowance in respect of any expenditure, and the whole of his interest in the land in question, or in any part of the land in question, is transferred, whether by operation of law or otherwise, to some other person, then, subject to subsection (4) below, for the part of the writing-down period falling after the date of the transfer, the person to whom the interest is transferred shall, to the exclusion of the person from whom it is transferred, be entitled to the allowances (a writing-down allowance to either of them for a chargeable period falling partly before and partly within that part of the writing-down period being reduced accordingly).

4

Where the interest transferred is in part only of the land, subsection (3) above shall apply to so much of the allowance as is properly referable to that part of the land as if it were a separate allowance.

5

For the purposes of subsections (3) and (4) above, where an interest in land is a tenancy and that tenancy comes to an end, that interest shall be deemed to have been transferred—

a

if an incoming tenant makes any payment to the outgoing tenant in respect of assets representing the expenditure, to the incoming tenant, and

b

in any other case, to the owner of the interest in immediate reversion on the tenancy.

6

For the purposes of this section as it applies for income tax purposes, the basis period for a year of assessment is the year ending with 31st March next preceding that year of assessment, or with such other date as may be agreed by the owner or tenant in question and the inspector, and section 160 shall not apply for the purposes of this section.

7

Subject to any provision to the contrary, any reference to this Part which is contained in this Part does not include a reference to this section.

123 Allowances for expenditure incurred after 31st March 1986.

Subject to the following provisions of this Part, if a person having a major interest in any agricultural land has incurred or incurs, after 31st March 1986 or, if it is expenditure under an existing contract, after 31st March 1987, any capital expenditure on the construction of farmhouses, farm buildings, cottages, fences or other works, there shall be made to him during a writing-down period of 25 years beginning on the first day of the chargeable period related to the incurring of the expenditure, writing-down allowances of an aggregate amount equal to that expenditure.

124 Expenditure qualifying for allowances.1

No expenditure shall be taken into account for the purposes of [writing-down allowances or] section 122, unless it is incurred for the purposes of husbandry on the agricultural land in question, and—

a

where the expenditure is on a farmhouse, one-third only of the expenditure shall be taken into account, or, if the accommodation and amenities of the farmhouse are out of due relation to the nature and extent of the farm, such proportion thereof not greater than one-third as may be just,

b

where expenditure is incurred on any asset other than a farmhouse, being an asset which is to serve partly the purposes of husbandry and partly other purposes, such apportionment of the expenditure shall be made for the purposes of [writing-down allowances or, as the case may be, section 122] as may be just.

2

In any case where—

a

capital expenditure is incurred on the construction of any building, fence or other works, but

b

when the building, fence or other works comes to be used it is not used for the purposes of husbandry,

the expenditure shall be left out of account for the purposes of [writing-down allowances] and, accordingly, any writing-down allowance made in respect of the expenditure under section 123 shall be withdrawn and all such assessments and adjustments of assessments shall be made as may be necessary to give effect to that withdrawal.

3

Where an allowance or charge is or has been made under section 24 by reference to an amount of qualifying expenditure which took account of a particular amount of capital expenditure, that capital expenditure shall be left out of account for the purposes of this Part.

This subsection shall not have effect in relation to any chargeable period ... ending after 26th July 1989.

124AInitial allowances: contracts entered into between October 1992 and November 1993.1

Subject to the following provisions of this Part, if a person having a major interest in any agricultural land incurs any expenditure to which this section applies, there shall be made to him, for the chargeable period which is that related to the incurring of the expenditure, an allowance (“an initial allowance”) equal to 20 per cent. of the amount of that expenditure.

2

This section applies to any expenditure falling within section 123 which is incurred under a contract which—

a

is entered into either—

i

in the period beginning with 1st November 1992 and ending with 31st October 1993; or

ii

for the purpose of securing that obligations under a contract entered into in that period are complied with;

but

b

is not entered into for the purpose of securing that obligations under a contract entered into before the beginning of that period are complied with.

3

No expenditure on the construction of any building, fence or other works shall be taken into account for the purposes of any initial allowance under this Part unless it is incurred for the purposes of husbandry on the agricultural land in question; and no initial allowance shall be made under this Part in respect of expenditure on the construction of any building, fence or other works unless the building, fence or other works is or is to be first used for the purposes of husbandry on or before 31st December 1994.

4

Where expenditure is incurred on a farmhouse or any asset (other than a farmhouse) which is to serve partly the purposes of husbandry and partly other purposes, the same apportionment of that expenditure shall be made for the purposes of any initial allowance under this Part as is required by section 124(1)(a) or (b) to be made for the purposes of writing-down allowances.

5

In a case where—

a

any expenditure to which this section applies is incurred on the construction of any building, fence or other works; and

b

either—

i

when the building, fence or other works comes to be used it is not used for the purposes of husbandry; or

ii

it has not come to be so used by the end of 31st December 1994,

the expenditure shall be left out of account for the purposes of initial allowances under this Part and, accordingly, any initial allowance made in respect of the expenditure under this section shall be withdrawn and all such assessments and adjustments of assessments shall be made as may be necessary to give effect to that withdrawal.

6

Subject to subsection (7) below, a person making a claim by virtue of this section as it applies for income tax purposes may require the initial allowance to be reduced to a specified amount; and a company may by notice given to the inspector not later than two years after the end of the chargeable period for which the allowance falls to be made disclaim the initial allowance or require it to be reduced to a specified amount.

7

Subsection (6) above shall have effect as respects allowances falling to be made for accounting periods ending after the day appointed for the purposes of section 10 of the principal Act (pay and file) with the omission of the words “as it applies for income tax purposes" and the words from “and a company" onwards.

124B Restriction on writing-down allowance where initial allowance made.

Where an initial allowance under this Part is made for any chargeable period in respect of any expenditure on the construction of a building, fence or other works, a writing-down allowance in respect of that expenditure shall be made under this Part for the same chargeable period only if the building, fence or other works has come to be used for the purposes of husbandry before the end of that period.

125 Meaning of “major interest" and “the relevant interest".1

In this Part a “major interest" in land means—

a

the fee simple estate in the land or an agreement to acquire that estate;

b

in Scotland, the estate or interest of the proprietor of thedominium utile (or, in the case or property other than feudal property, of the owner) and any agreement to acquire such an estate or interest, and

c

a lease.

2

Subject to the provisions of this section, in this Part “the relevant interest” means, in relation to any expenditure falling within section 123, the major interest in the agricultural land concerned to which the person who incurred the expenditure was entitled when he incurred it.

3

Where, when he incurs expenditure falling within section 123, a person is entitled to two or more major interests in the agricultural land concerned, and one of those interests is an interest which is in reversion on all the others, that interest is the relevant interest for the purposes of this Part.

4

A major interest shall not cease to be the relevant interest for the purposes of this Part by reason of the creation of any lease (or other interest) to which the interest is subject; and where the relevant interest is a lease which is extinguished—

a

by reason of the surrender thereof, or

b

on the person entitled thereto acquiring the interest which is the reversion on the relevant interest,

then, unless a new lease of the land concerned is granted to take effect on the extinguishment of the former lease, the interest into which that lease merges shall thereupon become the relevant interest.

126 Transfers of relevant interest.1

In any case where—

a

if a person (“the former owner") continued to be the owner of the relevant interest in any land, he would be entitled to [an allowance under this Part] in respect of any expenditure, and

b

another person (“the new owner") acquires the relevant interest in the whole or part of that land (whether by transfer, by operation of law or otherwise),

the former owner shall not be entitled to an allowance under this Part for any chargeable period of his after that related to the acquisition and the new owner shall be entitled to allowances under this Part for the chargeable period of his related to the acquisition and for subsequent chargeable periods falling within the writing-down period.

2

If, in a case falling within subsection (1) above, the date of the acquisition occurs during a chargeable period of the former owner ... , the former owner shall be entitled—

a

to the whole of any initial allowance for the chargeable period related to the acquisition; but

b

only to an appropriate proportion of any writing-down allowance for the chargeable period so related;

and, similarly, if the date of the acquisition occurs during a chargeable period of the new owner ... , the new owner shall be entitled only to an appropriate proportion of any writing-down allowance for the chargeable period (of his) related to the acquisition.

3

Where the new owner acquires the relevant interest in part only of the land concerned, subsections (1) and (2) above shall apply to so much only of the allowance as is properly referable to that part of the land as if it were a separate allowance.

4

Where section 125(4) applies and the person who owns the interest into which the lease is merged is not the same as the person who owned the lease, the relevant interest shall be treated for the purposes of this Part as acquired by the owner of the interest into which the lease is merged.

5

Where the relevant interest is a lease which comes to an end and section 125(4) does not apply, then, for the purposes of this Part—

a

if a new lease is granted to a person who makes any payment to the outgoing lessee in respect of assets representing the expenditure in question, the new lease shall be treated as the same interest as the former lease and, accordingly, the relevant interest shall be treated as acquired by the incoming lessee; and

b

if a new lease is granted to the person who was the lessee under the former lease, the new lease shall be treated as the same interest as the former lease; and

c

in any other case, the former lease and the interest of the person who was the landlord under the former lease shall be treated as the same interest and, accordingly, the relevant interest shall be treated as acquired by that person.

6

If, by virtue only of the operation of subsections (1) to (5) above and, where appropriate, section 146(2) and (3), the total allowances [(including any initial allowance)] which, apart from this subsection, would fall to be made under this Part in respect of any expenditure during the writing-down period appropriate to it would be less than the amount of that expenditure, then, for the chargeable period in which that writing-down period ends, the allowance in respect of that expenditure shall be increased to such amount as will secure that the total of the allowances equals the amount of that expenditure.

7

This section has effect subject to sections 127 to 133.

127 Buildings etc. bought unused.1

This section applies where expenditure falling within section 123 is expenditure on the construction of a building, fence or other works and, before the building, fence or works comes to be used, the relevant interest is sold.

2

Where this section applies—

a

the expenditure shall be left out of account for the purposes of this Part and, accordingly, any writing-down allowance made in respect of the expenditure shall be withdrawn and all such assessments and adjustments of assessments shall be made as may be necessary to give effect to that withdrawal;

b

section 126 shall not apply; and

c

the person who buys the relevant interest shall be treated for the purposes of this Part as having incurred, on the date when the purchase price becomes payable, expenditure falling within section 123 on the construction of the building, fence or other works.

3

The expenditure referred to in subsection (2)(c) above is whichever is the lesser of—

a

the net price paid by the person concerned for the purchase of the relevant interest; and

b

the expenditure referred to in subsection (1) above.

3A

The expenditure referred to in subsection (1) above includes neither—

a

expenditure which falls to be disregarded for the purposes of writing-down allowances by virtue of section 124(1); nor

b

expenditure some or all of which is expenditure to which section 124A applies.

3B

Accordingly, any expenditure which is treated as incurred under subsection (2)(c) above shall be treated (without prejudice to section 124(2)) as incurred for the purposes mentioned in section 124(1).

4

Where the relevant interest is sold more than once in circumstances falling within subsection (1) above, subsection (2)(c) (3) and (3B) above shall have effect only in relation to the last of those sales.

127APurchases of buildings and structures: cases involving initial allowances.1

This section shall apply (subject to subsection (2) below) where—

a

there is expenditure on the construction of any building, fence or other works (“the actual expenditure”) which—

i

is expenditure falling within section 123; and

ii

is not expenditure which would fall to be disregarded for the purposes of writing-down allowances by virtue of section 124(1);

b

some or all of the actual expenditure is expenditure to which section 124A applies or would be such expenditure if it were capital expenditure; and

c

before the building, fence or other works comes to be used, the relevant interest is sold.

2

In relation to any case in which the relevant interest is sold in pursuance of a contract entered into in the period beginning with 1st November 1992 and ending with 31st October 1993 by a person who—

a

carries on a trade which consists, in whole or in part, in the construction of buildings or structures with a view to their sale; and

b

has been entitled to that interest since before 1st November 1992,

section 124A(2) above shall have effect for the purposes of subsection (1)(b) above and subsection (6) below as if for the words from “contract which" onwards there were substituted “contract entered into either before 1st November 1993 or for the purpose of securing that obligations under a contract entered into before that date are complied with."

3

Where this section applies—

a

the actual expenditure shall be left out of account for the purposes of this Part and, accordingly—

i

any initial allowance or writing-down allowance made in respect of the actual expenditure shall be withdrawn; and

ii

all such assessments and adjustments of assessments shall be made as may be necessary to give effect to that withdrawal;

b

section 126 shall not apply;

c

the person who buys the relevant interest shall be treated for the purposes of this Part as having incurred, on the date when the purchase price becomes payable, expenditure falling within section 123 on the construction of the building, fence or other works (“the deemed expenditure”); and

d

the deemed expenditure shall be treated (without prejudice to section 124(2) and 124A(5)) as incurred for the purposes of husbandry on the agricultural land in question.

4

The deemed expenditure—

a

shall be whichever is the lesser of the net price paid by the person concerned for the purchase of the relevant interest and the actual expenditure; and

b

shall be regarded as comprising a section 124A element and a residual element.

5

The section 124A element of the deemed expenditure shall be calculated in accordance with the formula—

6

In subsection (5) above—

A is the deemed expenditure;

B is so much of the actual expenditure as is expenditure to which section 124A applies or expenditure that would be such expenditure if it were capital expenditure; and

C is the actual expenditure.

7

The residual element of the deemed expenditure shall be so much (if any) of the deemed expenditure as does not comprise the section 124A element.

8

Notwithstanding the provisions of subsection (3)(c) above—

a

the section 124A element of the deemed expenditure shall be treated for the purpose only of determining entitlement to allowances as expenditure to which that section applies; and

b

the residual element of the deemed expenditure shall be treated for that purpose as expenditure which is not expenditure to which that section applies.

9

Where the relevant interest is sold more than once before the building, fence or other works is used, subsections (2) and (3)(c) and (d) above shall have effect only in relation to the last of those sales.

128 Balancing allowances and charges.1

If, in respect of any expenditure falling within section 123, a balancing event occurs in a chargeable period ... and, apart from this section, a person would be entitled to an allowance under this Part in respect of that expenditure for the chargeable period related to that event, no such allowance shall be made but an allowance or charge (a “balancing allowance" or “balancing charge") shall, in the circumstances mentioned below, be made for that period to or, as the case may be, on the person entitled to the relevant interest immediately before that event occurs.

2

In relation to any expenditure, the amount of any balancing allowance or charge shall be determined in accordance with the following provisions of this section by reference to—

a

the residue of that expenditure, that is to say, the amount of that expenditure falling to be taken into account for the purposes of any allowances under this Part less the aggregate of any such allowances made in respect of it (whether or not to the person to or on whom the allowance or charge is to be made); and

b

subject to subsection (3) below, any sale, insurance, salvage or compensation moneys related to the event which gives rise to the balancing allowance or balancing charge.

3

If, by virtue of section 124(1)(a) or (b), only a portion of any expenditure falls to be taken into account for the purposes of allowances under this Part, any reference in subsections (4) and (5) below to the sale, insurance, salvage or compensation moneys is a reference only to the like portion of those moneys.

4

Where there are no sale, insurance, salvage or compensation moneys or where the residue of the expenditure immediately before the balancing event exceeds those moneys, a balancing allowance shall be made of an amount equal to that residue or, as the case may be, to the excess of it over those moneys.

5

If the sale, insurance, salvage or compensation moneys exceed the residue of the expenditure immediately before the event, a balancing charge shall be made on an amount equal to that excess.

6

Notwithstanding anything in subsection (5) above, in no case shall the amount on which a balancing charge is made on any person exceed the amount of the allowances under this Part made to him in respect of the expenditure before the balancing event.

7

If a balancing event relates to—

a

the acquisition of the relevant interest in part only of the land in which it subsisted at the time the expenditure was incurred, or

b

only part of the building, fence or other works on the construction of which the expenditure was incurred,

subsections (1) to (6) above shall apply to so much of the expenditure as is properly attributable to the part of the land, building, fence or other works concerned, as if it were an item of expenditure separate from the rest.

8

Where—

a

before 6th April 1990, a woman was entitled to the relevant interest in relation to expenditure falling within section 123 (whether she was entitled to it when the expenditure was incurred or acquired it afterwards);

b

for a chargeable period ending before that date, an allowance under section 123 was made to the woman’s husband in respect of her relevant interest; and

c

on or after that date there occurs an event which is a balancing event and in respect of which the woman is entitled to all or part of any sale, insurance, salvage or compensation moneys,

the allowance shall be treated for the purposes of subsection (6) above as having been made to the woman.

129 Balancing events.1

Subject to subsection (2) below, in relation to expenditure (“the original expenditure") for which, apart from section 128, a person (“the former owner") would be entitled to an allowance under this Part, the following events are balancing events for the purposes of this Part—

a

the acquisition of the relevant interest by another person (“the new owner") as mentioned in section 126; and

b

where any building, fence or other works on the construction of which the expenditure was incurred is demolished, destroyed or otherwise ceases to exist as such.

2

An event falling within subsection (1) above is not a balancing event for the purposes of this Part unless an election is made with respect to that event by notice given to the inspector not more than two years after the end of the chargeable period related to the occurrence of the event.

3

Where, during the writing-down period applicable to the original expenditure, a balancing event falling within subsection (1)(a) above occurs, the amount of any writing-down allowances to which the new owner is entitled for chargeable periods which, ... , end after the balancing event shall be determined as if—

a

that part of the writing-down period applicable to the original expenditure which falls after the balancing event were itself the writing-down period in which the allowances in respect of that expenditure were to be made; and

b

the allowances were in respect of expenditure equal to the residue of the original expenditure (determined under section 128(2)(a)) immediately before the balancing event less the amount of any balancing allowance made to the former owner or, as the case may be, plus the amount on which any balancing charge was made on him by reason of the balancing event.

4

Subject to subsection (5) below, an election under this section shall be made as follows—

a

where the event falls within subsection (1)(a) above, jointly by the former owner and the new owner; and

b

where the event falls within subsection (1)(b) above, by the former owner.

5

No election may be made under this section if any person by whom that election should be made is not within the charge to tax in the United Kingdom; and no election may be made in relation to an acquisition falling within subsection (1)(a) above if it appears with respect to that acquisition, or with respect to transactions of which that acquisition is one, that the sole or main benefit which (apart from section 157) might have been expected to accrue to the parties or any of them was the obtaining of an allowance, or a greater allowance, under this Part.

130 Restriction of balancing allowances on sale of buildings.1

This section has effect where—

a

the relevant interest in a building is sold subject to a subordinate interest; and

b

a balancing allowance under section 128 would, apart from this section, fall to be made to the person who is entitled to the relevant interest immediately before the sale (“the former owner") by virtue of the sale; and

c

either—

i

the former owner, the person to whom the relevant interest is sold and the grantee of the subordinate interest, or any two of them, are connected with each other within the terms of section 839 of the principal Act, or

ii

it appears with respect to the sale or to the grant of the subordinate interest, or with respect to transactions including the sale or grant, that the sole or main benefit which, apart from this section, might have been expected to accrue to the parties or any of them was the obtaining of an allowance under this Part.

2

For the purposes of section 128, the net proceeds to the former owner of the sale—

a

shall be taken to be increased by an amount equal to any premium receivable by him for the grant of the subordinate interest; and

b

where no rent, or no commercial rent, is payable in respect of the subordinate interest, shall be taken to be what those proceeds would have been if a commercial rent had been payable and the relevant interest had been sold in the open market (increased by any amount to be added under paragraph (a) above);

but the net proceeds of sale shall not by virtue of this subsection be taken to be greater than such amount as will secure that no balancing allowance falls to be made.

3

Where subsection (2) above operates in relation to a sale to deny or reduce a balancing allowance in respect of any expenditure, section 129(3) shall have effect as if that balancing allowance had been made or, as the case may be, had not been reduced.

4

In this section—

subordinate interest” means any interest in or right over the building in question (whether granted by the former owner or by somebody else);

premium” includes any capital consideration except so much of any sum as corresponds to any amount of rent or profits falling to be computed by reference to that sum under section 34 of the principal Act (premium treated as rent or Schedule D profits);

capital consideration” means consideration which consists of a capital sum or would be a capital sum if it had taken the form of a money payment;

rent” includes any consideration which is not capital consideration;

commercial rent” means such rent as may reasonably be expected to have been required in respect of the subordinate interest in question (having regard to any premium payable for the grant of the interest) if the transaction had been at arm’s length.

5

Where the terms on which a subordinate interest is granted are varied before the sale of the relevant interest, any capital consideration for the variation shall be treated for the purposes of this section as a premium for the grant of the interest, and the question whether any and, if so, what rent is payable in respect of the interest shall be determined by reference to the terms as in force immediately before the sale.

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<notes source="#source">
<note class="commentary F" eId="c2137589">
<p>
Words in s. 124(1) substituted (27.7.1993 with effect as mentioned in
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/section/114/2">s. 114(2)</ref>
of the amending Act) by
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34">1993 c. 34</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/section/114">s. 114</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/schedule/12/paragraph/2/1/a">Sch. 12 para. 2(1)(a)</ref>
</p>
</note>
<note class="commentary F" eId="c2137590">
<p>
Words in s. 124(1)(b) substituted (27.7.1993 with effect as mentioned in
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/section/114/2">s. 114(2)</ref>
of the amending Act) by
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34">1993 c. 34</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/section/114">s. 114</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/schedule/12/paragraph/2/1/b">Sch. 12 para. 2(1)(b)</ref>
</p>
</note>
<note class="commentary F" eId="c2137591">
<p>
Words in s. 124(2) substituted (27.7.1993 with effect as mentioned in
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/section/114/2">s. 114(2)</ref>
of the amending Act) by
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34">1993 c. 34</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/section/114">s. 114</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/schedule/12/paragraph/2/2">Sch. 12 para. 2(2)</ref>
</p>
</note>
<note class="commentary F" eId="c2137592">
<p>
Ss. 124A, 124B inserted (27.7.1993 with effect as mentioned in
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/section/114/2">s. 114(2)</ref>
of the amending Act) by
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34">1993 c. 34</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/section/114">s. 114</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/schedule/12/paragraph/3">Sch. 12 para.3</ref>
</p>
</note>
<note class="commentary F" eId="c2137593">
<p>
Ss. 124A, 124B inserted (27.7.1993 with effect as mentioned in
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/section/114/2">s. 114(2)</ref>
of the amending Act) by
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34">1993 c. 34</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/section/114">s. 114</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/schedule/12/paragraph/3">Sch. 12 para.3</ref>
</p>
</note>
<note class="commentary F" eId="c2137594">
<p>
Words in s. 126(1) substituted (27.7.1993 with effect as mentioned in
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/section/114/2">s. 114(2)</ref>
of the amending Act) by
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34">1993 c. 34</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/section/114">s. 114</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/schedule/12/paragraph/4/1">Sch. 12 para. 4(1)</ref>
</p>
</note>
<note class="commentary F" eId="c2137595">
<p>
S. 126(2) substituted (27.7.1993 with effect as mentioned in
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/section/114/2">s. 114(2)</ref>
of the amending Act) by
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34">1993 c. 34</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/section/114">s. 114</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/schedule/12/paragraph/4/2">Sch. 12 para. 4(2)</ref>
</p>
</note>
<note class="commentary F" eId="c2137596">
<p>
Words in s. 126(6) inserted (27.7.1993 with effect as mentioned in
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/section/114/2">s. 114(2)</ref>
of the amending Act) by
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34">1993 c. 34</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/section/114">s. 114</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/schedule/12/paragraph/4/3">Sch. 12 para. 4(3)</ref>
</p>
</note>
<note class="commentary F" eId="c2137597">
<p>
S. 127(3A)(3B) inserted (27.7.1993 with effect as mentioned in
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/section/114/2">s. 114(2)</ref>
of the amending Act) by
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34">1993 c. 34</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/section/114">s. 114</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/schedule/12/paragraph/5/1">Sch. 12 para. 5(1)</ref>
</p>
</note>
<note class="commentary F" eId="c2137598">
<p>
Words in s. 127(4) substituted (27.7.1993 with effect as mentioned in
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/section/114/2">s. 114(2)</ref>
of the amending Act) by
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34">1993 c. 34</ref>
, 114, Sch. 12 para. 5(2)
</p>
</note>
<note class="commentary F" eId="c2137599">
<p>
S. 127A inserted (27.7.1993 with effect as mentioned in
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/section/114/2">s. 114(2)</ref>
of the amending Act) by
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34">1993 c. 34</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/section/114">s. 114</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/schedule/12/paragraph/6">Sch. 12 para.6</ref>
</p>
</note>
<note class="commentary F" eId="c2137600">
<p>
Words in s. 128(1)(2) substituted (27.7.1993 with effect as mentioned in
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/section/114/2">s. 114(2)</ref>
of the amending Act) by
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34">1993 c. 34</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/section/114">s. 114</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/schedule/12/paragraph/7/1/2">Sch. 12 para. 7(1)(2)</ref>
</p>
</note>
<note class="commentary F" eId="c2137602">
<p>
Words in s. 128(3) inserted (27.7.1993 with effect as mentioned in
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/section/114/2">s. 114(2)</ref>
of the amending Act) by
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34">1993 c. 34</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/section/114">s. 114</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/schedule/12/paragraph/7/3">Sch. 12 para. 7(3)</ref>
</p>
</note>
<note class="commentary F" eId="c2137603">
<p>
Words in s. 128(6) substituted (27.7.1993 with effect as mentioned in
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/section/114/2">s. 114(2)</ref>
of the amending Act) by
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34">1993 c. 34</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/section/114">s. 114</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/schedule/12/paragraph/7/4">Sch. 12 para. 7(4)</ref>
</p>
</note>
<note class="commentary F" eId="c2137607">
<p>
Words in s. 129(1) substituted (27.7.1993 with effect as mentioned in
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/section/114/2">s. 114(2)</ref>
of the amending Act) by
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34">1993 c. 34</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/section/114">s. 114</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1993/34/schedule/12/paragraph/8">Sch. 12 para.8</ref>
</p>
</note>
<note class="commentary C" eId="c2137608">
<p>
S. 129(2) modified (for the year of assessment 1988-1989) by
<ref href="http://www.legislation.gov.uk/id/uksi/1991/851">S.I. 1991/851</ref>
,
<ref href="http://www.legislation.gov.uk/id/uksi/1991/851/regulation/1">regs. 1</ref>
,
<ref href="http://www.legislation.gov.uk/id/uksi/1991/851/regulation/9">9</ref>
,
<ref href="http://www.legislation.gov.uk/id/uksi/1991/851/schedule/2">Sch. 2</ref>
.
</p>
</note>
<note class="commentary C" eId="c2137609">
<p>
S. 129(2) modified (for the year of assessment 1989-1990) by
<ref href="http://www.legislation.gov.uk/id/uksi/1992/511">S.I. 1992/511</ref>
,
<ref href="http://www.legislation.gov.uk/id/uksi/1992/511/regulation/1">regs. 1</ref>
,
<ref href="http://www.legislation.gov.uk/id/uksi/1992/511/regulation/9">9</ref>
,
<ref href="http://www.legislation.gov.uk/id/uksi/1992/511/schedule/2">Sch. 2</ref>
.
</p>
</note>
<note class="commentary C" eId="c2137610">
<p>
S. 129(2) applied (with modifications) (for the year of assessment 1990–91) by
<ref href="http://www.legislation.gov.uk/id/uksi/1993/415">S.I. 1993/415</ref>
,
<ref href="http://www.legislation.gov.uk/id/uksi/1993/415/regulation/9">reg. 9</ref>
,
<ref href="http://www.legislation.gov.uk/id/uksi/1993/415/schedule/2">Sch. 2</ref>
</p>
</note>
<note class="commentary C" eId="key-aa876679f174b6b6f9c7ecd5d431acc5">
<p>
S. 129(2) modified (for the year of assessment 1991-92) by
<ref href="http://www.legislation.gov.uk/id/uksi/1994/728">The Lloyds Underwriters (Tax) (1991-92) Regulations 1994 (S.I. 1994/728)</ref>
,
<ref href="http://www.legislation.gov.uk/id/uksi/1994/728/regulation/1/1">regs. 1(1)</ref>
,
<ref href="http://www.legislation.gov.uk/id/uksi/1994/728/regulation/9">9</ref>
,
<ref href="http://www.legislation.gov.uk/id/uksi/1994/728/schedule/2">Sch. 2</ref>
</p>
</note>
<note class="commentary F" eId="key-5e03c382024b8d3f926484d12b5d541b">
<p>
Words in Act repealed (with effect in accordance with s. 211(2) of the amending Act) by
<ref href="http://www.legislation.gov.uk/id/ukpga/1994/9">Finance Act 1994 (c. 9)</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1994/9/section/213/1">s. 213(1)</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1994/9/schedule/26/part/5">Sch. 26 Pt. 5(24)</ref>
</p>
</note>
<note class="commentary C" eId="key-652c10ffd14bc0363ac04da2039c04c9">
<p>
S. 129(2) modified (19.9.1994) by
<ref href="http://www.legislation.gov.uk/id/ukpga/1994/21">Coal Industry Act 1994 (c. 21)</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1994/21/section/68/4">s. 68(4)</ref>
,
<ref href="http://www.legislation.gov.uk/id/ukpga/1994/21/schedule/4/paragraph/20/5">Sch. 4 para. 20(5)</ref>
;
<ref href="http://www.legislation.gov.uk/id/uksi/1994/2189">S.I. 1994/2189</ref>
, art. 2, Sch.
</p>
</note>
</notes>
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<portionBody period="#period7">
<part eId="part-V" period="#period9">
<num>Part V</num>
<heading>
Agricultural Buildings
<abbr title="et cetera" xml:lang="la">etc.</abbr>
</heading>
<chapter eId="part-V-chapter-I" period="#period9">
<num>Chapter I</num>
<heading> Agriculture</heading>
<section eId="section-122" period="#period4">
<num>122</num>
<heading> Allowances for expenditure incurred before 1st April 1986.</heading>
<subsection eId="section-122-1">
<num>1</num>
<content>
<p>Subject to the provisions of this section, where the owner or tenant of any agricultural land has, before 1st April 1986 or, if it is expenditure under an existing contract, before 1st April 1987, incurred any capital expenditure on the construction of farmhouses, farm buildings, cottages, fences or other works, there shall be made to him during a writing-down period of 8 years beginning with the chargeable period related to the incurring of that expenditure, writing-down allowances of an aggregate amount equal to four-fifths of that expenditure.</p>
</content>
</subsection>
<subsection eId="section-122-2">
<num>2</num>
<content>
<p>In any case where by virtue of subsection (3A) of section 68 of the 1968 Act the aggregate amount of allowances and the period during which allowances may be made under paragraph (b) of subsection (1) of that section (and accordingly also under subsection (1) above) are increased, the amount of the allowances and the period during which they may be made under subsection (1) above shall be similarly increased.</p>
</content>
</subsection>
<subsection eId="section-122-3">
<num>3</num>
<content>
<p>Where a person would, if he continued to be the owner or, as the case may be, the tenant of any land, be entitled under this section to a writing-down allowance in respect of any expenditure, and the whole of his interest in the land in question, or in any part of the land in question, is transferred, whether by operation of law or otherwise, to some other person, then, subject to subsection (4) below, for the part of the writing-down period falling after the date of the transfer, the person to whom the interest is transferred shall, to the exclusion of the person from whom it is transferred, be entitled to the allowances (a writing-down allowance to either of them for a chargeable period falling partly before and partly within that part of the writing-down period being reduced accordingly).</p>
</content>
</subsection>
<subsection eId="section-122-4">
<num>4</num>
<content>
<p>Where the interest transferred is in part only of the land, subsection (3) above shall apply to so much of the allowance as is properly referable to that part of the land as if it were a separate allowance.</p>
</content>
</subsection>
<subsection eId="section-122-5">
<num>5</num>
<intro>
<p>For the purposes of subsections (3) and (4) above, where an interest in land is a tenancy and that tenancy comes to an end, that interest shall be deemed to have been transferred—</p>
</intro>
<paragraph eId="section-122-5-a">
<num>a</num>
<content>
<p>if an incoming tenant makes any payment to the outgoing tenant in respect of assets representing the expenditure, to the incoming tenant, and</p>
</content>
</paragraph>
<paragraph eId="section-122-5-b">
<num>b</num>
<content>
<p>in any other case, to the owner of the interest in immediate reversion on the tenancy.</p>
</content>
</paragraph>
</subsection>
<subsection eId="section-122-6">
<num>6</num>
<content>
<p>For the purposes of this section as it applies for income tax purposes, the basis period for a year of assessment is the year ending with 31st March next preceding that year of assessment, or with such other date as may be agreed by the owner or tenant in question and the inspector, and section 160 shall not apply for the purposes of this section.</p>
</content>
</subsection>
<subsection eId="section-122-7">
<num>7</num>
<content>
<p>Subject to any provision to the contrary, any reference to this Part which is contained in this Part does not include a reference to this section.</p>
</content>
</subsection>
</section>
<section eId="section-123" period="#period4">
<num>123</num>
<heading> Allowances for expenditure incurred after 31st March 1986.</heading>
<content>
<p>Subject to the following provisions of this Part, if a person having a major interest in any agricultural land has incurred or incurs, after 31st March 1986 or, if it is expenditure under an existing contract, after 31st March 1987, any capital expenditure on the construction of farmhouses, farm buildings, cottages, fences or other works, there shall be made to him during a writing-down period of 25 years beginning on the first day of the chargeable period related to the incurring of the expenditure, writing-down allowances of an aggregate amount equal to that expenditure.</p>
</content>
</section>
<section eId="section-124" period="#period6">
<num>124</num>
<heading> Expenditure qualifying for allowances.</heading>
<subsection eId="section-124-1">
<num>1</num>
<intro>
<p>
No expenditure shall be taken into account for the purposes of [
<noteRef href="#c2137589" marker="F1" class="commentary F"/>
writing-down allowances or] section 122, unless it is incurred for the purposes of husbandry on the agricultural land in question, and—
</p>
</intro>
<paragraph eId="section-124-1-a">
<num>a</num>
<content>
<p>where the expenditure is on a farmhouse, one-third only of the expenditure shall be taken into account, or, if the accommodation and amenities of the farmhouse are out of due relation to the nature and extent of the farm, such proportion thereof not greater than one-third as may be just,</p>
</content>
</paragraph>
<paragraph eId="section-124-1-b">
<num>b</num>
<content>
<p>
where expenditure is incurred on any asset other than a farmhouse, being an asset which is to serve partly the purposes of husbandry and partly other purposes, such apportionment of the expenditure shall be made for the purposes of [
<noteRef href="#c2137590" marker="F2" class="commentary F"/>
writing-down allowances or, as the case may be, section 122] as may be just.
</p>
</content>
</paragraph>
</subsection>
<subsection eId="section-124-2">
<num>2</num>
<intro>
<p>In any case where—</p>
</intro>
<paragraph eId="section-124-2-a">
<num>a</num>
<content>
<p>capital expenditure is incurred on the construction of any building, fence or other works, but</p>
</content>
</paragraph>
<paragraph eId="section-124-2-b">
<num>b</num>
<content>
<p>when the building, fence or other works comes to be used it is not used for the purposes of husbandry,</p>
</content>
</paragraph>
<wrapUp>
<p>
the expenditure shall be left out of account for the purposes of [
<noteRef href="#c2137591" marker="F3" class="commentary F"/>
writing-down allowances] and, accordingly, any writing-down allowance made in respect of the expenditure under section 123 shall be withdrawn and all such assessments and adjustments of assessments shall be made as may be necessary to give effect to that withdrawal.
</p>
</wrapUp>
</subsection>
<subsection eId="section-124-3">
<num>3</num>
<content>
<p>Where an allowance or charge is or has been made under section 24 by reference to an amount of qualifying expenditure which took account of a particular amount of capital expenditure, that capital expenditure shall be left out of account for the purposes of this Part.</p>
<p>
This subsection shall not have effect in relation to any chargeable period
<noteRef href="#key-5e03c382024b8d3f926484d12b5d541b" marker="F16" class="commentary F"/>
... ending after 26th July 1989.
</p>
</content>
</subsection>
</section>
<section eId="section-124A" period="#period2">
<num>
<ins class="d30p12607">124A</ins>
</num>
<heading>
<noteRef href="#c2137592" marker="F4" class="commentary F"/>
<ins class="d30p12607 first">Initial allowances: contracts entered into between October 1992 and November 1993.</ins>
</heading>
<subsection eId="section-124A-1">
<num>
<ins class="d30p12607">1</ins>
</num>
<content>
<p>
<ins class="d30p12607">Subject to the following provisions of this Part, if a person having a major interest in any agricultural land incurs any expenditure to which this section applies, there shall be made to him, for the chargeable period which is that related to the incurring of the expenditure, an allowance (“</ins>
<term refersTo="#term-an-initial-allowance">
<ins class="d30p12607">an initial allowance</ins>
</term>
<ins class="d30p12607">”) equal to 20 per cent. of the amount of that expenditure.</ins>
</p>
</content>
</subsection>
<subsection eId="section-124A-2">
<num>
<ins class="d30p12607">2</ins>
</num>
<intro>
<p>
<ins class="d30p12607">This section applies to any expenditure falling within section 123 which is incurred under a contract which—</ins>
</p>
</intro>
<paragraph eId="section-124A-2-a">
<num>
<ins class="d30p12607">a</ins>
</num>
<intro>
<p>
<ins class="d30p12607">is entered into either—</ins>
</p>
</intro>
<subparagraph eId="section-124A-2-a-i">
<num>
<ins class="d30p12607">i</ins>
</num>
<content>
<p>
<ins class="d30p12607">in the period beginning with 1st November 1992 and ending with 31st October 1993; or</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="section-124A-2-a-ii">
<num>
<ins class="d30p12607">ii</ins>
</num>
<content>
<p>
<ins class="d30p12607">for the purpose of securing that obligations under a contract entered into in that period are complied with;</ins>
</p>
</content>
</subparagraph>
<wrapUp>
<p>
<ins class="d30p12607">but</ins>
</p>
</wrapUp>
</paragraph>
<paragraph eId="section-124A-2-b">
<num>
<ins class="d30p12607">b</ins>
</num>
<content>
<p>
<ins class="d30p12607">is not entered into for the purpose of securing that obligations under a contract entered into before the beginning of that period are complied with.</ins>
</p>
</content>
</paragraph>
</subsection>
<subsection eId="section-124A-3">
<num>
<ins class="d30p12607">3</ins>
</num>
<content>
<p>
<ins class="d30p12607">No expenditure on the construction of any building, fence or other works shall be taken into account for the purposes of any initial allowance under this Part unless it is incurred for the purposes of husbandry on the agricultural land in question; and no initial allowance shall be made under this Part in respect of expenditure on the construction of any building, fence or other works unless the building, fence or other works is or is to be first used for the purposes of husbandry on or before 31st December 1994.</ins>
</p>
</content>
</subsection>
<subsection eId="section-124A-4">
<num>
<ins class="d30p12607">4</ins>
</num>
<content>
<p>
<ins class="d30p12607">Where expenditure is incurred on a farmhouse or any asset (other than a farmhouse) which is to serve partly the purposes of husbandry and partly other purposes, the same apportionment of that expenditure shall be made for the purposes of any initial allowance under this Part as is required by section 124(1)(a) or (b) to be made for the purposes of writing-down allowances.</ins>
</p>
</content>
</subsection>
<subsection eId="section-124A-5">
<num>
<ins class="d30p12607">5</ins>
</num>
<intro>
<p>
<ins class="d30p12607">In a case where—</ins>
</p>
</intro>
<paragraph eId="section-124A-5-a">
<num>
<ins class="d30p12607">a</ins>
</num>
<content>
<p>
<ins class="d30p12607">any expenditure to which this section applies is incurred on the construction of any building, fence or other works; and</ins>
</p>
</content>
</paragraph>
<paragraph eId="section-124A-5-b">
<num>
<ins class="d30p12607">b</ins>
</num>
<intro>
<p>
<ins class="d30p12607">either—</ins>
</p>
</intro>
<subparagraph eId="section-124A-5-b-i">
<num>
<ins class="d30p12607">i</ins>
</num>
<content>
<p>
<ins class="d30p12607">when the building, fence or other works comes to be used it is not used for the purposes of husbandry; or</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="section-124A-5-b-ii">
<num>
<ins class="d30p12607">ii</ins>
</num>
<content>
<p>
<ins class="d30p12607">it has not come to be so used by the end of 31st December 1994,</ins>
</p>
</content>
</subparagraph>
</paragraph>
<wrapUp>
<p>
<ins class="d30p12607">the expenditure shall be left out of account for the purposes of initial allowances under this Part and, accordingly, any initial allowance made in respect of the expenditure under this section shall be withdrawn and all such assessments and adjustments of assessments shall be made as may be necessary to give effect to that withdrawal.</ins>
</p>
</wrapUp>
</subsection>
<subsection eId="section-124A-6">
<num>
<ins class="d30p12607">6</ins>
</num>
<content>
<p>
<ins class="d30p12607">Subject to subsection (7) below, a person making a claim by virtue of this section as it applies for income tax purposes may require the initial allowance to be reduced to a specified amount; and a company may by notice given to the inspector not later than two years after the end of the chargeable period for which the allowance falls to be made disclaim the initial allowance or require it to be reduced to a specified amount.</ins>
</p>
</content>
</subsection>
<subsection eId="section-124A-7">
<num>
<ins class="d30p12607">7</ins>
</num>
<content>
<p>
<ins class="d30p12607 last">Subsection (6) above shall have effect as respects allowances falling to be made for accounting periods ending after the day appointed for the purposes of section 10 of the principal Act (pay and file) with the omission of the words “as it applies for income tax purposes" and the words from “and a company" onwards.</ins>
</p>
</content>
</subsection>
</section>
<section eId="section-124B" period="#period2">
<num>
<ins class="M_F_efaef87c-faab-46d1-ca1c-ef2a6484993a-1562678014498">124B</ins>
</num>
<heading>
<ins class="M_F_efaef87c-faab-46d1-ca1c-ef2a6484993a-1562678014498 first">
<noteRef href="#c2137593" marker="F5" class="commentary attribute F"/>
Restriction on writing-down allowance where initial allowance made.
</ins>
</heading>
<content>
<p>
<ins class="M_F_efaef87c-faab-46d1-ca1c-ef2a6484993a-1562678014498 last">Where an initial allowance under this Part is made for any chargeable period in respect of any expenditure on the construction of a building, fence or other works, a writing-down allowance in respect of that expenditure shall be made under this Part for the same chargeable period only if the building, fence or other works has come to be used for the purposes of husbandry before the end of that period.</ins>
</p>
</content>
</section>
<section eId="section-125" period="#period4">
<num>125</num>
<heading> Meaning of “major interest" and “the relevant interest".</heading>
<subsection eId="section-125-1">
<num>1</num>
<intro>
<p>In this Part a “major interest" in land means—</p>
</intro>
<paragraph eId="section-125-1-a">
<num>a</num>
<content>
<p>the fee simple estate in the land or an agreement to acquire that estate;</p>
</content>
</paragraph>
<paragraph eId="section-125-1-b">
<num>b</num>
<content>
<p>
in Scotland, the estate or interest of the proprietor of the
<em>dominium utile</em>
(or, in the case or property other than feudal property, of the owner) and any agreement to acquire such an estate or interest, and
</p>
</content>
</paragraph>
<paragraph eId="section-125-1-c">
<num>c</num>
<content>
<p>a lease.</p>
</content>
</paragraph>
</subsection>
<subsection eId="section-125-2">
<num>2</num>
<content>
<p>
Subject to the provisions of this section, in this Part “
<term refersTo="#term-the-relevant-interest">the relevant interest</term>
” means, in relation to any expenditure falling within section 123, the major interest in the agricultural land concerned to which the person who incurred the expenditure was entitled when he incurred it.
</p>
</content>
</subsection>
<subsection eId="section-125-3">
<num>3</num>
<content>
<p>Where, when he incurs expenditure falling within section 123, a person is entitled to two or more major interests in the agricultural land concerned, and one of those interests is an interest which is in reversion on all the others, that interest is the relevant interest for the purposes of this Part.</p>
</content>
</subsection>
<subsection eId="section-125-4">
<num>4</num>
<intro>
<p>A major interest shall not cease to be the relevant interest for the purposes of this Part by reason of the creation of any lease (or other interest) to which the interest is subject; and where the relevant interest is a lease which is extinguished—</p>
</intro>
<paragraph eId="section-125-4-a">
<num>a</num>
<content>
<p>by reason of the surrender thereof, or</p>
</content>
</paragraph>
<paragraph eId="section-125-4-b">
<num>b</num>
<content>
<p>on the person entitled thereto acquiring the interest which is the reversion on the relevant interest,</p>
</content>
</paragraph>
<wrapUp>
<p>then, unless a new lease of the land concerned is granted to take effect on the extinguishment of the former lease, the interest into which that lease merges shall thereupon become the relevant interest.</p>
</wrapUp>
</subsection>
</section>
<section eId="section-126" period="#period6">
<num>126</num>
<heading> Transfers of relevant interest.</heading>
<subsection eId="section-126-1">
<num>1</num>
<intro>
<p>In any case where—</p>
</intro>
<paragraph eId="section-126-1-a">
<num>a</num>
<content>
<p>
if a person (“the former owner") continued to be the owner of the relevant interest in any land, he would be entitled to [
<noteRef href="#c2137594" marker="F6" class="commentary F"/>
an allowance under this Part] in respect of any expenditure, and
</p>
</content>
</paragraph>
<paragraph eId="section-126-1-b">
<num>b</num>
<content>
<p>another person (“the new owner") acquires the relevant interest in the whole or part of that land (whether by transfer, by operation of law or otherwise),</p>
</content>
</paragraph>
<wrapUp>
<p>the former owner shall not be entitled to an allowance under this Part for any chargeable period of his after that related to the acquisition and the new owner shall be entitled to allowances under this Part for the chargeable period of his related to the acquisition and for subsequent chargeable periods falling within the writing-down period.</p>
</wrapUp>
</subsection>
<subsection eId="section-126-2">
<num>
<noteRef href="#c2137595" marker="F7" class="commentary F"/>
<ins class="d30p12824 first">2</ins>
</num>
<intro>
<p>
<ins class="d30p12824">If, in a case falling within subsection (1) above, the date of the acquisition occurs during a chargeable period of the former owner </ins>
<noteRef href="#key-5e03c382024b8d3f926484d12b5d541b" marker="F16" class="commentary F"/>
<ins class="d30p12824">... , the former owner shall be entitled—</ins>
</p>
</intro>
<paragraph eId="section-126-2-a">
<num>
<ins class="d30p12824">a</ins>
</num>
<content>
<p>
<ins class="d30p12824">to the whole of any initial allowance for the chargeable period related to the acquisition; but</ins>
</p>
</content>
</paragraph>
<paragraph eId="section-126-2-b">
<num>
<ins class="d30p12824">b</ins>
</num>
<content>
<p>
<ins class="d30p12824">only to an appropriate proportion of any writing-down allowance for the chargeable period so related;</ins>
</p>
</content>
</paragraph>
<wrapUp>
<p>
<ins class="d30p12824">and, similarly, if the date of the acquisition occurs during a chargeable period of the new owner </ins>
<noteRef href="#key-5e03c382024b8d3f926484d12b5d541b" marker="F16" class="commentary F"/>
<ins class="d30p12824 last">... , the new owner shall be entitled only to an appropriate proportion of any writing-down allowance for the chargeable period (of his) related to the acquisition.</ins>
</p>
</wrapUp>
</subsection>
<subsection eId="section-126-3">
<num>3</num>
<content>
<p>Where the new owner acquires the relevant interest in part only of the land concerned, subsections (1) and (2) above shall apply to so much only of the allowance as is properly referable to that part of the land as if it were a separate allowance.</p>
</content>
</subsection>
<subsection eId="section-126-4">
<num>4</num>
<content>
<p>Where section 125(4) applies and the person who owns the interest into which the lease is merged is not the same as the person who owned the lease, the relevant interest shall be treated for the purposes of this Part as acquired by the owner of the interest into which the lease is merged.</p>
</content>
</subsection>
<subsection eId="section-126-5">
<num>5</num>
<intro>
<p>Where the relevant interest is a lease which comes to an end and section 125(4) does not apply, then, for the purposes of this Part—</p>
</intro>
<paragraph eId="section-126-5-a">
<num>a</num>
<content>
<p>if a new lease is granted to a person who makes any payment to the outgoing lessee in respect of assets representing the expenditure in question, the new lease shall be treated as the same interest as the former lease and, accordingly, the relevant interest shall be treated as acquired by the incoming lessee; and</p>
</content>
</paragraph>
<paragraph eId="section-126-5-b">
<num>b</num>
<content>
<p>if a new lease is granted to the person who was the lessee under the former lease, the new lease shall be treated as the same interest as the former lease; and</p>
</content>
</paragraph>
<paragraph eId="section-126-5-c">
<num>c</num>
<content>
<p>in any other case, the former lease and the interest of the person who was the landlord under the former lease shall be treated as the same interest and, accordingly, the relevant interest shall be treated as acquired by that person.</p>
</content>
</paragraph>
</subsection>
<subsection eId="section-126-6">
<num>6</num>
<content>
<p>
If, by virtue only of the operation of subsections (1) to (5) above and, where appropriate, section 146(2) and (3), the total allowances [
<noteRef href="#c2137596" marker="F8" class="commentary F"/>
(including any initial allowance)] which, apart from this subsection, would fall to be made under this Part in respect of any expenditure during the writing-down period appropriate to it would be less than the amount of that expenditure, then, for the chargeable period in which that writing-down period ends, the allowance in respect of that expenditure shall be increased to such amount as will secure that the total of the allowances equals the amount of that expenditure.
</p>
</content>
</subsection>
<subsection eId="section-126-7">
<num>7</num>
<content>
<p>This section has effect subject to sections 127 to 133.</p>
</content>
</subsection>
</section>
<section eId="section-127" period="#period2">
<num>127</num>
<heading>
Buildings
<abbr title="et cetera" xml:lang="la">etc.</abbr>
bought unused.
</heading>
<subsection eId="section-127-1">
<num>1</num>
<content>
<p>This section applies where expenditure falling within section 123 is expenditure on the construction of a building, fence or other works and, before the building, fence or works comes to be used, the relevant interest is sold.</p>
</content>
</subsection>
<subsection eId="section-127-2">
<num>2</num>
<intro>
<p>Where this section applies—</p>
</intro>
<paragraph eId="section-127-2-a">
<num>a</num>
<content>
<p>the expenditure shall be left out of account for the purposes of this Part and, accordingly, any writing-down allowance made in respect of the expenditure shall be withdrawn and all such assessments and adjustments of assessments shall be made as may be necessary to give effect to that withdrawal;</p>
</content>
</paragraph>
<paragraph eId="section-127-2-b">
<num>b</num>
<content>
<p>section 126 shall not apply; and</p>
</content>
</paragraph>
<paragraph eId="section-127-2-c">
<num>c</num>
<content>
<p>the person who buys the relevant interest shall be treated for the purposes of this Part as having incurred, on the date when the purchase price becomes payable, expenditure falling within section 123 on the construction of the building, fence or other works.</p>
</content>
</paragraph>
</subsection>
<subsection eId="section-127-3">
<num>3</num>
<intro>
<p>The expenditure referred to in subsection (2)(c) above is whichever is the lesser of—</p>
</intro>
<paragraph eId="section-127-3-a">
<num>a</num>
<content>
<p>the net price paid by the person concerned for the purchase of the relevant interest; and</p>
</content>
</paragraph>
<paragraph eId="section-127-3-b">
<num>b</num>
<content>
<p>the expenditure referred to in subsection (1) above.</p>
</content>
</paragraph>
</subsection>
<subsection eId="section-127-3A">
<num>
<noteRef href="#c2137597" marker="F9" class="commentary F"/>
<ins class="d30p12953 first">3A</ins>
</num>
<intro>
<p>
<ins class="d30p12953">The expenditure referred to in subsection (1) above includes neither—</ins>
</p>
</intro>
<paragraph eId="section-127-3A-a">
<num>
<ins class="d30p12953">a</ins>
</num>
<content>
<p>
<ins class="d30p12953">expenditure which falls to be disregarded for the purposes of writing-down allowances by virtue of section 124(1); nor</ins>
</p>
</content>
</paragraph>
<paragraph eId="section-127-3A-b">
<num>
<ins class="d30p12953">b</ins>
</num>
<content>
<p>
<ins class="d30p12953">expenditure some or all of which is expenditure to which section 124A applies.</ins>
</p>
</content>
</paragraph>
</subsection>
<subsection eId="section-127-3B">
<num>
<ins class="d30p12953">3B</ins>
</num>
<content>
<p>
<ins class="d30p12953 last">Accordingly, any expenditure which is treated as incurred under subsection (2)(c) above shall be treated (without prejudice to section 124(2)) as incurred for the purposes mentioned in section 124(1).</ins>
</p>
</content>
</subsection>
<subsection eId="section-127-4">
<num>4</num>
<content>
<p>
Where the relevant interest is sold more than once in circumstances falling within subsection (1) above, subsection (2)(c)
<ins class="d30p12986 first last">
<noteRef href="#c2137598" marker="F10" class="commentary attribute F"/>
(3) and (3B)
</ins>
above shall have effect only in relation to the last of those sales.
</p>
</content>
</subsection>
</section>
<section eId="section-127A" period="#period2">
<num>
<ins class="d30p12993">127A</ins>
</num>
<heading>
<noteRef href="#c2137599" marker="F11" class="commentary F"/>
<ins class="d30p12993 first">Purchases of buildings and structures: cases involving initial allowances.</ins>
</heading>
<subsection eId="section-127A-1">
<num>
<ins class="d30p12993">1</ins>
</num>
<intro>
<p>
<ins class="d30p12993">This section shall apply (subject to subsection (2) below) where—</ins>
</p>
</intro>
<paragraph eId="section-127A-1-a">
<num>
<ins class="d30p12993">a</ins>
</num>
<intro>
<p>
<ins class="d30p12993">there is expenditure on the construction of any building, fence or other works (“</ins>
<term refersTo="#term-the-actual-expenditure">
<ins class="d30p12993">the actual expenditure</ins>
</term>
<ins class="d30p12993">”) which—</ins>
</p>
</intro>
<subparagraph eId="section-127A-1-a-i">
<num>
<ins class="d30p12993">i</ins>
</num>
<content>
<p>
<ins class="d30p12993">is expenditure falling within section 123; and</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="section-127A-1-a-ii">
<num>
<ins class="d30p12993">ii</ins>
</num>
<content>
<p>
<ins class="d30p12993">is not expenditure which would fall to be disregarded for the purposes of writing-down allowances by virtue of section 124(1);</ins>
</p>
</content>
</subparagraph>
</paragraph>
<paragraph eId="section-127A-1-b">
<num>
<ins class="d30p12993">b</ins>
</num>
<content>
<p>
<ins class="d30p12993">some or all of the actual expenditure is expenditure to which section 124A applies or would be such expenditure if it were capital expenditure; and</ins>
</p>
</content>
</paragraph>
<paragraph eId="section-127A-1-c">
<num>
<ins class="d30p12993">c</ins>
</num>
<content>
<p>
<ins class="d30p12993">before the building, fence or other works comes to be used, the relevant interest is sold.</ins>
</p>
</content>
</paragraph>
</subsection>
<subsection eId="section-127A-2">
<num>
<ins class="d30p12993">2</ins>
</num>
<intro>
<p>
<ins class="d30p12993">In relation to any case in which the relevant interest is sold in pursuance of a contract entered into in the period beginning with 1st November 1992 and ending with 31st October 1993 by a person who—</ins>
</p>
</intro>
<paragraph eId="section-127A-2-a">
<num>
<ins class="d30p12993">a</ins>
</num>
<content>
<p>
<ins class="d30p12993">carries on a trade which consists, in whole or in part, in the construction of buildings or structures with a view to their sale; and</ins>
</p>
</content>
</paragraph>
<paragraph eId="section-127A-2-b">
<num>
<ins class="d30p12993">b</ins>
</num>
<content>
<p>
<ins class="d30p12993">has been entitled to that interest since before 1st November 1992,</ins>
</p>
</content>
</paragraph>
<wrapUp>
<p>
<ins class="d30p12993">section 124A(2) above shall have effect for the purposes of subsection (1)(b) above and subsection (6) below as if for the words from “contract which" onwards there were substituted “contract entered into either before 1st November 1993 or for the purpose of securing that obligations under a contract entered into before that date are complied with."</ins>
</p>
</wrapUp>
</subsection>
<subsection eId="section-127A-3">
<num>
<ins class="d30p12993">3</ins>
</num>
<intro>
<p>
<ins class="d30p12993">Where this section applies—</ins>
</p>
</intro>
<paragraph eId="section-127A-3-a">
<num>
<ins class="d30p12993">a</ins>
</num>
<intro>
<p>
<ins class="d30p12993">the actual expenditure shall be left out of account for the purposes of this Part and, accordingly—</ins>
</p>
</intro>
<subparagraph eId="section-127A-3-a-i">
<num>
<ins class="d30p12993">i</ins>
</num>
<content>
<p>
<ins class="d30p12993">any initial allowance or writing-down allowance made in respect of the actual expenditure shall be withdrawn; and</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="section-127A-3-a-ii">
<num>
<ins class="d30p12993">ii</ins>
</num>
<content>
<p>
<ins class="d30p12993">all such assessments and adjustments of assessments shall be made as may be necessary to give effect to that withdrawal;</ins>
</p>
</content>
</subparagraph>
</paragraph>
<paragraph eId="section-127A-3-b">
<num>
<ins class="d30p12993">b</ins>
</num>
<content>
<p>
<ins class="d30p12993">section 126 shall not apply;</ins>
</p>
</content>
</paragraph>
<paragraph eId="section-127A-3-c">
<num>
<ins class="d30p12993">c</ins>
</num>
<content>
<p>
<ins class="d30p12993">the person who buys the relevant interest shall be treated for the purposes of this Part as having incurred, on the date when the purchase price becomes payable, expenditure falling within section 123 on the construction of the building, fence or other works (“</ins>
<term refersTo="#term-the-deemed-expenditure">
<ins class="d30p12993">the deemed expenditure</ins>
</term>
<ins class="d30p12993">”); and</ins>
</p>
</content>
</paragraph>
<paragraph eId="section-127A-3-d">
<num>
<ins class="d30p12993">d</ins>
</num>
<content>
<p>
<ins class="d30p12993">the deemed expenditure shall be treated (without prejudice to section 124(2) and 124A(5)) as incurred for the purposes of husbandry on the agricultural land in question.</ins>
</p>
</content>
</paragraph>
</subsection>
<subsection eId="section-127A-4">
<num>
<ins class="d30p12993">4</ins>
</num>
<intro>
<p>
<ins class="d30p12993">The deemed expenditure—</ins>
</p>
</intro>
<paragraph eId="section-127A-4-a">
<num>
<ins class="d30p12993">a</ins>
</num>
<content>
<p>
<ins class="d30p12993">shall be whichever is the lesser of the net price paid by the person concerned for the purchase of the relevant interest and the actual expenditure; and</ins>
</p>
</content>
</paragraph>
<paragraph eId="section-127A-4-b">
<num>
<ins class="d30p12993">b</ins>
</num>
<content>
<p>
<ins class="d30p12993">shall be regarded as comprising a section 124A element and a residual element.</ins>
</p>
</content>
</paragraph>
</subsection>
<subsection eId="section-127A-5">
<num>
<ins class="d30p12993">5</ins>
</num>
<content>
<p>
<ins class="d30p12993">The section 124A element of the deemed expenditure shall be calculated in accordance with the formula—</ins>
</p>
<foreign/>
</content>
</subsection>
<subsection eId="section-127A-6">
<num>
<ins class="d30p12993">6</ins>
</num>
<content>
<p>
<ins class="d30p12993">In subsection (5) above—</ins>
</p>
<blockList class="unordered">
<item>
<p>
<ins class="d30p12993">A is the deemed expenditure;</ins>
</p>
</item>
<item>
<p>
<ins class="d30p12993">B is so much of the actual expenditure as is expenditure to which section 124A applies or expenditure that would be such expenditure if it were capital expenditure; and</ins>
</p>
</item>
<item>
<p>
<ins class="d30p12993">C is the actual expenditure.</ins>
</p>
</item>
</blockList>
</content>
</subsection>
<subsection eId="section-127A-7">
<num>
<ins class="d30p12993">7</ins>
</num>
<content>
<p>
<ins class="d30p12993">The residual element of the deemed expenditure shall be so much (if any) of the deemed expenditure as does not comprise the section 124A element.</ins>
</p>
</content>
</subsection>
<subsection eId="section-127A-8">
<num>
<ins class="d30p12993">8</ins>
</num>
<intro>
<p>
<ins class="d30p12993">Notwithstanding the provisions of subsection (3)(c) above—</ins>
</p>
</intro>
<paragraph eId="section-127A-8-a">
<num>
<ins class="d30p12993">a</ins>
</num>
<content>
<p>
<ins class="d30p12993">the section 124A element of the deemed expenditure shall be treated for the purpose only of determining entitlement to allowances as expenditure to which that section applies; and</ins>
</p>
</content>
</paragraph>
<paragraph eId="section-127A-8-b">
<num>
<ins class="d30p12993">b</ins>
</num>
<content>
<p>
<ins class="d30p12993">the residual element of the deemed expenditure shall be treated for that purpose as expenditure which is not expenditure to which that section applies.</ins>
</p>
</content>
</paragraph>
</subsection>
<subsection eId="section-127A-9">
<num>
<ins class="d30p12993">9</ins>
</num>
<content>
<p>
<ins class="d30p12993 last">Where the relevant interest is sold more than once before the building, fence or other works is used, subsections (2) and (3)(c) and (d) above shall have effect only in relation to the last of those sales.</ins>
</p>
</content>
</subsection>
</section>
<section eId="section-128" period="#period10">
<num>128</num>
<heading> Balancing allowances and charges.</heading>
<subsection eId="section-128-1">
<num>1</num>
<content>
<p>
If, in respect of any expenditure falling within section 123, a balancing event occurs in a chargeable period
<noteRef href="#key-5e03c382024b8d3f926484d12b5d541b" marker="F16" class="commentary F"/>
... and, apart from this section, a person would be entitled to
<ins class="d30p13205 first last">
<noteRef href="#c2137600" marker="F12" class="commentary attribute F"/>
an allowance under this Part
</ins>
in respect of that expenditure for the chargeable period related to that event, no such allowance shall be made but an allowance or charge (a “balancing allowance" or “balancing charge") shall, in the circumstances mentioned below, be made for that period to or, as the case may be, on the person entitled to the relevant interest immediately before that event occurs.
</p>
</content>
</subsection>
<subsection eId="section-128-2" period="#period7">
<num>2</num>
<intro>
<p>In relation to any expenditure, the amount of any balancing allowance or charge shall be determined in accordance with the following provisions of this section by reference to—</p>
</intro>
<paragraph eId="section-128-2-a">
<num>a</num>
<content>
<p>
the residue of that expenditure, that is to say, the amount of that expenditure falling to be taken into account for the purposes of
<ins class="d30p13221 first last">
<noteRef href="#c2137600" marker="F12" class="commentary attribute F"/>
any allowances under this Part less the aggregate of any such allowances
</ins>
made in respect of it (whether or not to the person to or on whom the allowance or charge is to be made); and
</p>
</content>
</paragraph>
<paragraph eId="section-128-2-b">
<num>b</num>
<content>
<p>subject to subsection (3) below, any sale, insurance, salvage or compensation moneys related to the event which gives rise to the balancing allowance or balancing charge.</p>
</content>
</paragraph>
</subsection>
<subsection eId="section-128-3">
<num>3</num>
<content>
<p>
If, by virtue of section 124(1)(a) or (b), only a portion of any expenditure falls to be taken into account for the purposes of
<ins class="d30p13237 first last">
<noteRef href="#c2137602" marker="F13" class="commentary attribute F"/>
allowances under
</ins>
this Part, any reference in subsections (4) and (5) below to the sale, insurance, salvage or compensation moneys is a reference only to the like portion of those moneys.
</p>
</content>
</subsection>
<subsection eId="section-128-4">
<num>4</num>
<content>
<p>Where there are no sale, insurance, salvage or compensation moneys or where the residue of the expenditure immediately before the balancing event exceeds those moneys, a balancing allowance shall be made of an amount equal to that residue or, as the case may be, to the excess of it over those moneys.</p>
</content>
</subsection>
<subsection eId="section-128-5">
<num>5</num>
<content>
<p>If the sale, insurance, salvage or compensation moneys exceed the residue of the expenditure immediately before the event, a balancing charge shall be made on an amount equal to that excess.</p>
</content>
</subsection>
<subsection eId="section-128-6">
<num>6</num>
<content>
<p>
Notwithstanding anything in subsection (5) above, in no case shall the amount on which a balancing charge is made on any person exceed the amount of the
<ins class="d30p13259 first last">
<noteRef href="#c2137603" marker="F14" class="commentary attribute F"/>
allowances under this Part
</ins>
made to him in respect of the expenditure before the balancing event.
</p>
</content>
</subsection>
<subsection eId="section-128-7">
<num>7</num>
<intro>
<p>If a balancing event relates to—</p>
</intro>
<paragraph eId="section-128-7-a">
<num>a</num>
<content>
<p>the acquisition of the relevant interest in part only of the land in which it subsisted at the time the expenditure was incurred, or</p>
</content>
</paragraph>
<paragraph eId="section-128-7-b">
<num>b</num>
<content>
<p>only part of the building, fence or other works on the construction of which the expenditure was incurred,</p>
</content>
</paragraph>
<wrapUp>
<p>subsections (1) to (6) above shall apply to so much of the expenditure as is properly attributable to the part of the land, building, fence or other works concerned, as if it were an item of expenditure separate from the rest.</p>
</wrapUp>
</subsection>
<subsection eId="section-128-8">
<num>8</num>
<intro>
<p>Where—</p>
</intro>
<paragraph eId="section-128-8-a">
<num>a</num>
<content>
<p>before 6th April 1990, a woman was entitled to the relevant interest in relation to expenditure falling within section 123 (whether she was entitled to it when the expenditure was incurred or acquired it afterwards);</p>
</content>
</paragraph>
<paragraph eId="section-128-8-b">
<num>b</num>
<content>
<p>for a chargeable period ending before that date, an allowance under section 123 was made to the woman’s husband in respect of her relevant interest; and</p>
</content>
</paragraph>
<paragraph eId="section-128-8-c">
<num>c</num>
<content>
<p>on or after that date there occurs an event which is a balancing event and in respect of which the woman is entitled to all or part of any sale, insurance, salvage or compensation moneys,</p>
</content>
</paragraph>
<wrapUp>
<p>the allowance shall be treated for the purposes of subsection (6) above as having been made to the woman.</p>
</wrapUp>
</subsection>
</section>
<section eId="section-129" period="#period5">
<num>129</num>
<heading> Balancing events.</heading>
<subsection eId="section-129-1">
<num>1</num>
<intro>
<p>
Subject to subsection (2) below, in relation to expenditure (“the original expenditure") for which, apart from section 128, a person (“the former owner") would be entitled to
<ins class="d30p13323 first last">
<noteRef href="#c2137607" marker="F15" class="commentary attribute F"/>
an allowance under this Part
</ins>
, the following events are balancing events for the purposes of this Part—
</p>
</intro>
<paragraph eId="section-129-1-a">
<num>a</num>
<content>
<p>the acquisition of the relevant interest by another person (“the new owner") as mentioned in section 126; and</p>
</content>
</paragraph>
<paragraph eId="section-129-1-b">
<num>b</num>
<content>
<p>where any building, fence or other works on the construction of which the expenditure was incurred is demolished, destroyed or otherwise ceases to exist as such.</p>
</content>
</paragraph>
</subsection>
<subsection eId="section-129-2" period="#period3">
<num>
<noteRef href="#c2137608" marker="C1" class="commentary C"/>
<noteRef href="#c2137609" marker="C2" class="commentary C"/>
<noteRef href="#c2137610" marker="C3" class="commentary C"/>
<noteRef href="#key-aa876679f174b6b6f9c7ecd5d431acc5" marker="C4" class="commentary C"/>
<noteRef href="#key-652c10ffd14bc0363ac04da2039c04c9" marker="C5" class="commentary C"/>
2
</num>
<content>
<p>An event falling within subsection (1) above is not a balancing event for the purposes of this Part unless an election is made with respect to that event by notice given to the inspector not more than two years after the end of the chargeable period related to the occurrence of the event.</p>
</content>
</subsection>
<subsection eId="section-129-3" period="#period1">
<num>3</num>
<intro>
<p>
Where, during the writing-down period applicable to the original expenditure, a balancing event falling within subsection (1)(a) above occurs, the amount of any writing-down allowances to which the new owner is entitled for chargeable periods which,
<noteRef href="#key-5e03c382024b8d3f926484d12b5d541b" marker="F16" class="commentary F"/>
... , end after the balancing event shall be determined as if—
</p>
</intro>
<paragraph eId="section-129-3-a">
<num>a</num>
<content>
<p>that part of the writing-down period applicable to the original expenditure which falls after the balancing event were itself the writing-down period in which the allowances in respect of that expenditure were to be made; and</p>
</content>
</paragraph>
<paragraph eId="section-129-3-b">
<num>b</num>
<content>
<p>the allowances were in respect of expenditure equal to the residue of the original expenditure (determined under section 128(2)(a)) immediately before the balancing event less the amount of any balancing allowance made to the former owner or, as the case may be, plus the amount on which any balancing charge was made on him by reason of the balancing event.</p>
</content>
</paragraph>
</subsection>
<subsection eId="section-129-4">
<num>4</num>
<intro>
<p>Subject to subsection (5) below, an election under this section shall be made as follows—</p>
</intro>
<paragraph eId="section-129-4-a">
<num>a</num>
<content>
<p>where the event falls within subsection (1)(a) above, jointly by the former owner and the new owner; and</p>
</content>
</paragraph>
<paragraph eId="section-129-4-b">
<num>b</num>
<content>
<p>where the event falls within subsection (1)(b) above, by the former owner.</p>
</content>
</paragraph>
</subsection>
<subsection eId="section-129-5">
<num>5</num>
<content>
<p>No election may be made under this section if any person by whom that election should be made is not within the charge to tax in the United Kingdom; and no election may be made in relation to an acquisition falling within subsection (1)(a) above if it appears with respect to that acquisition, or with respect to transactions of which that acquisition is one, that the sole or main benefit which (apart from section 157) might have been expected to accrue to the parties or any of them was the obtaining of an allowance, or a greater allowance, under this Part.</p>
</content>
</subsection>
</section>
<section eId="section-130" period="#period4">
<num>130</num>
<heading> Restriction of balancing allowances on sale of buildings.</heading>
<subsection eId="section-130-1">
<num>1</num>
<intro>
<p>This section has effect where—</p>
</intro>
<paragraph eId="section-130-1-a">
<num>a</num>
<content>
<p>the relevant interest in a building is sold subject to a subordinate interest; and</p>
</content>
</paragraph>
<paragraph eId="section-130-1-b">
<num>b</num>
<content>
<p>a balancing allowance under section 128 would, apart from this section, fall to be made to the person who is entitled to the relevant interest immediately before the sale (“the former owner") by virtue of the sale; and</p>
</content>
</paragraph>
<paragraph eId="section-130-1-c">
<num>c</num>
<intro>
<p>either—</p>
</intro>
<subparagraph eId="section-130-1-c-i">
<num>i</num>
<content>
<p>the former owner, the person to whom the relevant interest is sold and the grantee of the subordinate interest, or any two of them, are connected with each other within the terms of section 839 of the principal Act, or</p>
</content>
</subparagraph>
<subparagraph eId="section-130-1-c-ii">
<num>ii</num>
<content>
<p>it appears with respect to the sale or to the grant of the subordinate interest, or with respect to transactions including the sale or grant, that the sole or main benefit which, apart from this section, might have been expected to accrue to the parties or any of them was the obtaining of an allowance under this Part.</p>
</content>
</subparagraph>
</paragraph>
</subsection>
<subsection eId="section-130-2">
<num>2</num>
<intro>
<p>For the purposes of section 128, the net proceeds to the former owner of the sale—</p>
</intro>
<paragraph eId="section-130-2-a">
<num>a</num>
<content>
<p>shall be taken to be increased by an amount equal to any premium receivable by him for the grant of the subordinate interest; and</p>
</content>
</paragraph>
<paragraph eId="section-130-2-b">
<num>b</num>
<content>
<p>where no rent, or no commercial rent, is payable in respect of the subordinate interest, shall be taken to be what those proceeds would have been if a commercial rent had been payable and the relevant interest had been sold in the open market (increased by any amount to be added under paragraph (a) above);</p>
</content>
</paragraph>
<wrapUp>
<p>but the net proceeds of sale shall not by virtue of this subsection be taken to be greater than such amount as will secure that no balancing allowance falls to be made.</p>
</wrapUp>
</subsection>
<subsection eId="section-130-3">
<num>3</num>
<content>
<p>Where subsection (2) above operates in relation to a sale to deny or reduce a balancing allowance in respect of any expenditure, section 129(3) shall have effect as if that balancing allowance had been made or, as the case may be, had not been reduced.</p>
</content>
</subsection>
<subsection eId="section-130-4">
<num>4</num>
<content>
<p>In this section—</p>
<blockList class="unordered">
<item>
<p>
<term refersTo="#term-subordinate-interest">subordinate interest</term>
” means any interest in or right over the building in question (whether granted by the former owner or by somebody else);
</p>
</item>
<item>
<p>
<term refersTo="#term-premium">premium</term>
” includes any capital consideration except so much of any sum as corresponds to any amount of rent or profits falling to be computed by reference to that sum under section 34 of the principal Act (premium treated as rent or Schedule D profits);
</p>
</item>
<item>
<p>
<term refersTo="#term-capital-consideration">capital consideration</term>
” means consideration which consists of a capital sum or would be a capital sum if it had taken the form of a money payment;
</p>
</item>
<item>
<p>
<term refersTo="#term-rent">rent</term>
” includes any consideration which is not capital consideration;
</p>
</item>
<item>
<p>
<term refersTo="#term-commercial-rent">commercial rent</term>
” means such rent as may reasonably be expected to have been required in respect of the subordinate interest in question (having regard to any premium payable for the grant of the interest) if the transaction had been at arm’s length.
</p>
</item>
</blockList>
</content>
</subsection>
<subsection eId="section-130-5">
<num>5</num>
<content>
<p>Where the terms on which a subordinate interest is granted are varied before the sale of the relevant interest, any capital consideration for the variation shall be treated for the purposes of this section as a premium for the grant of the interest, and the question whether any and, if so, what rent is payable in respect of the interest shall be determined by reference to the terms as in force immediately before the sale.</p>
</content>
</subsection>
</section>
</chapter>
</part>
</portionBody>
</portion>
</akomaNtoso>