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Chapter II
Treatment of Capital Allowances
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Interpretation.
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317.—(1) In this Chapter—
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“balancing charges” means balancing charges under Part XVI;
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“capital allowances” means allowances, other than allowances falling to be made in computing profits or gains, under section 241 or Part XIV, XV, XVI or XVII;
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“year of claim” means, in relation to any claim under section 307, the year of assessment for which the claim is made.
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(2) For the purposes of this Chapter—
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(a) where the end of the basis period for a year of assessment falls in or coincides with the end of any year of assessment, that year is the basis year for the first-mentioned year of assessment, but so that if a year of assessment would under the foregoing provision be the basis year both for that year itself and another year of assessment, it shall be the basis year for the year itself and not for the other year;
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(b) any reference to capital allowances or balancing charges for a year of assessment shall be construed as a reference to those falling to be made in charging the profits or gains of the trade for that year, excluding, in the case of allowances, amounts carried forward from an earlier year;
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(c) effect shall be deemed to be given in charging the profits or gains of the trade for a year of assessment to allowances carried forward from an earlier year before it is given to allowances for the year of assessment; and
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(d) any reference to an amount of capital allowances non-effective in a year of assessment shall be construed as referring to the amount to which by reason of an insufficiency of profits or gains effect cannot be given in charging the profits or gains of the trade for that year.
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In paragraph (a) “the basis period for a year of assessment” means in relation to any trade the period on the profits or gains of which income tax for that year falls to be finally computed under Case I of Schedule D in respect of the trade or, where, by virtue of this Act, the profits or gains of any other period are to be taken to be the profits or gains of the said period, that other period.
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