PART VIOil Taxation
CHAPTER IGeneral
137Expenditure met by regional development grants to be disregarded for certain purposes
1
In paragraph 8 of Schedule 3 to the principal Act (certain subsidised expenditure to be disregarded) in sub-paragraph (1) the words from " unless it is so met by a grant" onwards shall be omitted.
2
Subject to subsection (3) below, in any case where, by virtue of the said paragraph 8 as amended by subsection (1) above, expenditure which has been or is to be met by a regional development grant is not to be regarded for any of the purposes of Part I of the principal Act as having been incurred by any person, that particular grant shall be regarded as not falling within the reference to a regional development grant in—
a
section 84(1) of the [1968 c. 3.] Capital Allowances Act 1968 (treatment of subsidised expenditure for the purposes of the main reliefs for capital expenditure); or
b
section 95(6) of that Act (treatment of subsidised expenditure for the purposes of allowances relevant to scientific research).
3
If, in a case falling within subsection (2) above, only a proportion of the expenditure which has been or is to be met by a regional development grant is expenditure which, if it were not so met, would be allowable under section 3 or section 4 of the principal Act, only a corresponding proportion of the grant shall be regarded as not falling within the reference to regional development grant in the provisions referred to in subsection (2) above.
4
Subsection (5) below applies in any case where—
a
a person has incurred expenditure (by way of purchase, rent or otherwise) on the acquisition of an asset in a transaction to which paragraph 2 of Schedule 4 to the principal Act applies (transactions between connected persons and otherwise than at arm's length), and
b
the expenditure incurred by the other person referred to in that paragraph in acquiring, bringing into existence or enhancing the value of the asset as mentioned in that paragraph has been or is to be met by a regional development grant and, in whole or in part, falls to be taken into account under Chapter I of Part I, or under Part II, of the [1968 c. 3.] Capital Allowances Act 1968 (industrial buildings and structures and scientific research) or Chapter I of Part III of the [1971 c. 68.] Finance Act 1971 (machinery and plant).
5
Where this subsection applies, for the purposes of the charge of income tax or corporation tax on the income arising from those activities of the person referred to in subsection (4) (a) above which are treated by virtue of subsection (1) of section 13 of the principal Act as a separate trade for those purposes, the expenditure referred to in subsection (4)(a) above shall be treated as reduced by the amount of the regional development grant referred to in subsection (4)(b) above.
6
In this section " regional development grant" means a grant made under Part I of the [1972 c. 63.] Industry Act 1972 or such grant made under an enactment of the Parliament of Northern Ireland or Measure of the Northern Ireland Assembly as has been or may be declared by the Treasury under section 84 or section 95 of the Capital Allowances Act 1968 to correspond to a grant made under the said Part I.
7
This section applies in any case where—
a
the expenditure to which the regional development grant relates is incurred after 9th March 1982 ; and
b
the regional development grant concerned is paid after that date.