Finance Act 1949

Balancing allowances and charges

7 Where any machinery or plant which has been used by a person for the purposes of a trade, profession, employment, vocation or office carried on or held by him, has also been used by him for other purposes, then, in determining whether a balancing allowance or balancing charge falls to be made to or on him in charging the profits or gains of the trade, profession, employment, vocation or office, and in determining the amount of the allowance or, as the case may be, the amount on which the charge is to be made, regard shall be had to all the relevant circumstances of the case and, in particular, to the extent of the use for the said other purposes, and there shall be made to or on him an allowance of such an amount, or, as the case may be, a charge on such an amount, as may be just and reasonable.

8 Subject to the provisions of this paragraph, no balancing allowance or balancing charge shall be made to or on any person in respect of any machinery or plant in charging the profits or gains of a trade, profession, employment, vocation or office if any sums which are in respect of, or take account of, the wear and tear to that machinery or plant occasioned by its use for the purposes of the trade, profession, employment, vocation or office, and do not fall to be taken into account as his income or in computing the profits or gains of any trade, profession, employment, vocation or office carried on or held by him, were paid, or are or are to be payable, to him directly or indirectly by the Crown, or by any government or public or local authority, whether in the United Kingdom or elsewhere, or by any person other than the person carrying on or holding the trade, profession, employment, vocation or office:

Provided that where the sums referred to in this paragraph are in respect of, or take account of, part only of the wear and tear therein referred to—

(a) the preceding provisions of this paragraph shall not apply; but

(b) in determining whether it is an allowance or a charge which is to be made and the amount of the allowance or, as the case may be, the amount on which the charge is to be made, regard shall be had to all the relevant circumstances of the case and there shall be made an allowance of such an amount or, as the case may be, a charge on such an amount, as may be just and reasonable.

9 (1) Subject to the provisions of this paragraph, the provisions of paragraph 6 of this Part of this Schedule shall apply for the purpose of determining whether any, and if so what, balancing allowance or balancing charge falls to be made to or on a person as they apply for the purpose of determining whether any, and if so what, annual allowance falls to be made to a person.

(2) The only years for which an annual allowance is to be deemed for the purposes of this paragraph to have been made shall be years during which the machinery or plant was not used by the person in question for the purposes of the trade, profession, employment, vocation or office, and years during which the trade, profession, employment, vocation or office was not carried on or held by him, or was not carried on or held by him in such circumstances that the profits or gains or emoluments thereof were liable to assessment to income tax.

(3) Nothing in this paragraph shall affect the provisions of subsection (4) of section seventeen, or of the proviso to section nineteen, or of subsection (2) of section twenty-three, of the Income Tax Act, 1945, but where an allowance is deemed, by virtue of the proviso to the said section nineteen, or by virtue of subsection (2) of the said section twenty-three, to have been made for any year of assessment, an allowance shall not also be deemed to have been made for the same year by virtue of this paragraph.