Finance Act 1989

Miscellaneous U.K.

112 Security: trades etc. U.K.

(1) This section applies in computing, for the purposes of Case I or Case IIof Schedule D, the [F1 profits] of a trade, profession or vocation carriedon by an individual or by a partnership of individuals.

(2) In a case where this section applies, nothing in section 74(a) or (b) ofthe Taxes Act 1988 (deductions limited by reference to purposes of trade etc.)shall prevent the deduction of a sum in respect of expenditure incurred inconnection with the provision for or use by the individual, or any of theindividuals, of a security asset or security service.

(3) Subsection (2) above shall not apply unless the asset or service isprovided or used to meet a threat which—

(a) is a special threat to the individual’s personal physical security, and

(b) arises wholly or mainly by virtue of the particular trade, profession orvocation concerned.

(4) Subsection (2) above shall not apply unless the person incurring theexpenditure has as his sole object in doing so the meeting of that threat.

(5) Subsection (2) above shall not apply in the case of a service unless thebenefit resulting to the individual consists wholly or mainly of animprovement of his personal physical security.

(6) Subsection (2) above shall not apply in the case of an asset unless theperson incurring the expenditure intends the asset to be used solely toimprove personal physical security.

(7) But in a case where—

(a) apart from subsection (6) above, subsection (2) above would apply in thecase of an asset, and

(b) the person incurring the expenditure intends the asset to be used partlyto improve personal physical security,

subsection (2) shall nevertheless apply, but only as regards theappropriate proportion of the expenditure there mentioned.

(8) For the purposes of subsection (7) above the appropriate proportion of theexpenditure mentioned in subsection (2) above is such proportion of thatexpenditure as is attributable to the intention of the person incurring itthat the asset be used to improve personal physical security.

Textual Amendments

F1 Word in s. 112(1) substituted (31.7.1998) by 1998 c. 36, s. 46(3), Sch. 7 para. 3

Modifications etc. (not altering text)

C1 S. 112 applied (31.7.1998 with effect as mentioned in s. 38(2)(3) of 1998 c. 36) by 1988 c. 1, s. 21A(2) (as substituted by 1998 c. 36, s. 38(1), Sch. 5 Pt. I paras. 4, 73)

113 Security: trades etc. (supplementary). U.K.

(1) For the purposes of section 112 above—

(a) a security asset is an asset which improves personal security,

(b) a security service is a service which improves personal security,

(c) references to an asset do not include references to a car, a ship or anaircraft,

(d) references to an asset or service do not include references to a dwellingor grounds appurtenant to a dwelling, and

(e) references to an asset include references to equipment and a structure(such as a wall).

(2) If the person incurring the expenditure intends the asset to be usedsolely to improve personal physical security, but there is another use for theasset which is incidental to improving personal physical security, that otheruse shall be ignored in construing section 112(6) above.

(3) The fact that an asset or service improves the personal physical securityof any member of the family or household of the individual concerned, as wellas that of the individual, shall not prevent section 112(2) above fromapplying.

(4) For the purposes of section 112 above in its application to an asset, itis immaterial whether or not the asset becomes affixed to land (whetherconstituting a dwelling or otherwise).

(5) For the purposes of section 112 above in its application to an asset, itis immaterial whether or not the individual concerned is or becomes entitledto the property in the asset or (in the case of a fixture) an estate orinterest in the land concerned.

(6) Section 112 above applies where expenditure is incurred on or after 6thApril 1989.

Modifications etc. (not altering text)

C2 S. 113 applied (31.7.1998 with effect as mentioned in s. 38(2)(3) of 1998 c. 36) by 1988 c. 1, s. 21A(2) (as substituted by 1998 c. 36, s. 38(1), Sch. 5 Pt. I paras. 4, 73)

114 Relief for pre-trading expenditure. U.K.

(1) In section 401(1) of the Taxes Act 1988 (which gives relief forexpenditure incurred by a person within three years before he begins to carryon a trade, profession or vocation), for the word “three” there shall besubstituted the word “five”.

(2) This section shall have effect where the time when the person begins tocarry on the trade, profession or vocation falls after the end of March 1989.

115 Double taxation: tax credits. U.K.

(1) Where any arrangements having effect by virtue of section 788 of the TaxesAct 1988 provide —

(a) for persons who are resident outside the United Kingdom and who receivedistributions from companies resident in the United Kingdom to be entitled totax credits, and

(b) for the amount paid to such a person by way of tax credit to be determinedby reference to the amount to which an individual resident in the UnitedKingdom would have been entitled, subject to a deduction calculated byreference to the aggregate of the amount or value of the distribution and theamount of the tax credit paid,

the arrangements shall be construed as providing for that deduction tobe calculated by reference to the gross amount or value of the distributionand tax credit, without any allowance for the deduction itself.

(2) This section shall have effect in relation to payments made before thepassing of this Act as well as those made after that time, except that itshall not affect—

(a) the judgment of any court given before 25th October 1988, or

(b) the law to be applied in proceedings on appeal to the Court of Appeal orthe House of Lords where the judgment of the High Court or the Court ofSession which is in issue was given before that date.

F2 116 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . U.K.

Textual Amendments

F2 S. 116 repealed (29.4.1996 with effect as mentioned in s. 105(1) of the amending Act) by 1996 c. 8, s. 205, Sch. 41 Pt. V(3), note