Finance Act, 1992
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Development expenditure: capital allowances and charges. |
83.—(1) Subject to subsection (4), the provisions of the Tax Acts regarding allowances and charges in respect of capital expenditure shall have effect in relation to a petroleum trade as if each reference therein to machinery or plant included a reference to assets, not being machinery or plant, representing development expenditure. | |
(2) In relation to assets representing development expenditure, subsection (1) of section 241 of the Income Tax Act, 1967 , shall, subject to subsection (3), have effect as if “to be made to him, as representing the diminished value by reason of wear and tear of that machinery or plant during the chargeable period, shall be a sum equal to the value of that machinery or plant at the commencement of the chargeable period, and such allowance shall be made in taxing the trade” were substituted for all the words from “shall be a sum equal to five-fourths of the amount” to the end of the subsection. | ||
(3) Assets representing development expenditure shall not be treated, for the purposes of subsection (1) of section 241 of the Income Tax Act, 1967 , as being in use for the purposes of a petroleum trade at the end of any chargeable period or its basis period which ends before the commencement of production of petroleum in commercial quantities from the relevant field in connection with which the assets were provided. | ||
(4) Parts XIV and XV, and Chapters I, III and IV of Part XVI, of the Income Tax Act, 1967 , and sections 2 and 4 of the Finance Act, 1968 , shall not have effect as respects development expenditure. | ||
(5) (a) For the purposes of this section, assets representing development expenditure shall be deemed to include assets (hereafter in this subsection referred to as “leased assets”) provided for leasing to a person carrying on a petroleum trade where such leased assets would, if they had been provided by that person, be assets representing development expenditure; and, where this paragraph applies, | ||
(i) section 241 of the Income Tax Act, 1967 , shall have effect as if the trade for the purposes of which the leased assets are (or would, under subsection (5) of the said section 241, be regarded as being) in use were a petroleum trade carried on by the lessor, and | ||
(ii) section 40 of the Finance Act, 1984 , shall have effect as if each reference therein to machinery or plant included a reference to assets, not being machinery or plant, representing development expenditure. | ||
(b) For the purposes of subsection (4), capital expenditure on the provision of leased assets shall be deemed to be development expenditure. |