Finance Act 1995

Valid from 01/05/1995

The Capital Allowances Act 1990 (c. 1) U.K.

29 (1) In section 9 of the Capital Allowances Act 1990 (manner of making industrial buildings allowance), in subsection (1), for “mentioned in subsections (2) to (7) below” there shall be substituted “ where subsections (2) to (7) below apply ”.

(2) After that subsection there shall be inserted the following subsections—

“(1A) In the case of an allowance or charge made to or on a person whose interest in the building or structure is subject to a lease at the relevant time, subsection (1) above shall have effect for the purposes of income tax—

(a) as if any Schedule A business carried on by that person at any time in the chargeable period for which the allowance or charge is made were the trade in the taxing of which the allowance or charge were to be made; or

(b) where that person is not carrying on such a business at any time in that period, as if he were carrying on such a business and the business were the trade in the taxing of which the allowance or charge is to be made;

and this Act shall have effect in each case as if the Schedule A business which is deemed to be a trade for the purposes of this subsection were a trade set up and commenced on or after 6th April 1995.

(1B) In subsection (1A) above “the relevant time”—

(a) in relation to an initial allowance, means the time when the expenditure is incurred or any subsequent time before the building or structure is used for any purpose;

(b) in relation to a writing-down allowance, means the end of the chargeable period for which the allowance is made; and

(c) in relation to a balancing allowance or charge, means the time immediately before the event giving rise to the allowance or charge.”

(3) At the beginning of subsections (2), (3), (4) and (6) of that section there shall be inserted, in each case, the words “ For the purposes of corporation tax ”; and in subsection (6), paragraph (a) and, in paragraph (b), the words “ if it is a charge to corporation tax ” shall be omitted.

30 In subsection (2) of section 15 of that Act of 1990 (method of making allowances and charges in the case of buildings falling temporarily out of use), at the beginning there shall be inserted “For the purposes of corporation tax” and after that subsection there shall be inserted the following subsection—

“(2A) For the purposes of income tax any allowance or charge falling to be made to any person in respect of a building or structure during a period while the building or structure—

(a) is temporarily out of use, but

(b) is deemed by virtue of subsection (1) above still to be an industrial building or structure,

shall be made, in a case falling within subsection (2)(a) or (b) above, in accordance with section 9(1A) as if (where section 9(1A) does not otherwise apply) the building or structure were subject to a lease at the relevant time.”

31 Section 29(1) of that Act of 1990 (commercial letting of furnished holiday accommodation to be treated as trade for the purposes of Part II), except so far as it applies for the purposes of corporation tax, shall have effect as if the following paragraph were substituted for paragraph (a)—

“(a) any Schedule A business consisting in the commercial letting of furnished holiday accommodation in the United Kingdom shall be treated as a trade; and”.

32 In section 67(3) of that Act of 1990 (manner of making allowance in certain cases in respect of expenditure on thermal insulation), for “shall (notwithstanding section 73(2)), be available” there shall be substituted “ shall be made to any person for the purposes of income tax in accordance with section 32(1B) and (1C) of the principal Act and, for the purposes of corporation tax, shall be available (notwithstanding section 73(2)) ”.

33 In section 73 of that Act of 1990 (manner of making allowances and charges in respect of machinery and plant), after subsection (3) there shall be inserted the following subsection—

“(4) Subsections (2) and (3) above apply subject to the provisions of section 32(1B) of the principal Act.”

34 (1) In section 92 of that Act of 1990 (manner of making assured tenancy allowances and related charges), at the beginning there shall be inserted the following subsection— “ (A1) For the purposes of income tax any allowance or charge made to or on any person under this Part shall be made to or on him in taxing his trade—

(a) as if any Schedule A business carried on by that person were the trade in the taxing of which the allowance or charge were to be made; or

(b) where that person is not carrying on such a business, as if he were carrying on such a business and that business were the trade in the taxing of which the allowance or charge is to be made;

and this Act shall have effect in each case as if the Schedule A business which is deemed to be a trade for the purposes of this subsection were a trade set up and commenced on or after 6th April 1995. ”

(2) In subsections (1) and (2) of that section, at the beginning there shall be inserted, in each case, the words “ For the purposes of corporation tax ”; and in subsection (2), paragraph (a) and, in paragraph (b), the words “if it is a charge to corporation tax” shall be omitted.

35 (1) After subsection (2) of section 132 of that Act of 1990 (manner of making agricultural buildings allowances and related charges), there shall be inserted the following subsection—

“(2A) In the case of an allowance or charge which falls to be made to a person for a chargeable period in which he is not carrying on a trade, subsection (2) above shall have effect for the purposes of income tax—

(a) as if any Schedule A business carried on by that person at that time were the trade in the taxing of which the allowance or charge were to be made; or

(b) where that person is not carrying on such a business at that time, as if he were carrying on such a business and the business were the trade in the taxing of which the allowance or charge is to be made;

and this Act shall have effect in each case as if the Schedule A business which is deemed to be a trade for the purposes of this subsection were a trade set up and commenced on or after 6th April 1995.”

(2) In subsections (3) and (4) of that section, at the beginning there shall be inserted, in each case, the words “ For the purposes of corporation tax ”; and in subsection (4), paragraph (a) and, in paragraph (b), the words “if it is a charge to corporation tax” shall be omitted.