Finance Act, 1980

Farming: provision relating to capital allowances.

26.—(1) In this section—

“farming” has the same meaning as in Chapter II of Part I of the Finance Act, 1974 :

“specified machinery or plant” means machinery or plant in use or intended for use for the purposes of a trade of farming but not including fixed machinery and fixed plant designed to be used exclusively in a farm building and which is in use or is intended to be used in such a building;

“specified provisions” means section 251 of the Income Tax Act, 1967 , section 11 of the Finance Act, 1967 and section 26 of the Finance Act, 1971 .

(2) In determining what capital allowances fall to be made to a person for any chargeable period commencing on or after the 6th day of April, 1980, in taxing a trade of farming—

(a) in a case where the aggregate of the capital allowances which would fall to be so made to the person for the chargeable period if the specified provisions did not apply or have effect for that chargeable period in relation to specified machinery or plant, or the expenditure on the provision thereof, amounts to or exceeds 30 per cent. of the amount of the profits or gains from farming on which the person is chargeable to tax for that chargeable period, the said specified provisions shall not apply or have effect in the case of that person for that chargeable period in relation to specified machinery or plant, and

(b) in any other case the amount or the aggregate amount of—

(i) any capital allowance or allowances given under any of the specified provisions, and

(ii) any amount or amounts by which any capital allowance or allowances may be increased under any of the specified provisions, shall be limited to the maximum amount which will secure that the aggregate of the capital allowances falling to be made to the person for the chargeable period in taxing the trade of farming shall not exceed 30 per cent. of the profits or gains from farming on which the person is chargeable to tax for the chargeable period.