Finance Act, 1974

Farming: allowances for capital expenditure on construction of buildings and other works.

22.—(1) This section applies to any person carrying on farming, the profits or gains of which are chargeable to tax in accordance with the provisions of section 15 (1).

(2) Where a person to whom this section applies incurs, for the purpose of farming farm land occupied by him, any capital expenditure on the construction of farmhouses, farm buildings, cottages, fences or other works, there shall be made in charging the profits or gains from farming the said farm land an annual allowance (in this section referred to as a farm buildings allowance) equal to one-tenth of the said expenditure for the first relevant year of assessment and for each subsequent year of assessment until the allowances made under this section in respect of the expenditure equal the amount of the expenditure:

Provided that this subsection shall not apply to any expenditure incurred before the 6th day of April, 1974,

(3) Any capital expenditure as aforesaid incurred on or after the 6th day of April, 1974, by a person about to carry on farming but before commencing farming shall, for the purposes of this section, be treated as if it had been incurred on the first day on which he commences farming.

(4) Where capital expenditure as aforesaid is incurred on a farmhouse, one-third only of that expenditure shall be taken into account, or, if the accommodation and amenities of the farmhouse are out of due relation to the nature and extent of the farm, such proportion thereof not greater than one-third as may be just.

(5) For the purposes of this section, the first relevant year of assessment, in relation to expenditure incurred by any person, is the year in his basis period (within the meaning of section 297 of the Income Tax Act, 1967 ) for which he incurs the expenditure.

(6) Any claim by a person for an allowance falling to be made to him under the provisions of this section shall be included in the annual statement required to be delivered under the Income Tax Acts of the profits or gains from farming, and the allowance shall be made as a deduction in charging those profits or gains, and section 241 (3) of the Income Tax Act, 1967 , shall apply in relation to the allowance as it applies in relation to deductions allowable in respect of wear and tear of machinery or plant.

(7) Any claim for an allowance under the provisions of this section shall be made to and determined by the inspector, but any person aggrieved by any decision of the inspector on any such claim may, on giving notice in writing to the inspector within twenty-one days after the notification to him of the decision, appeal to the Appeal Commissioners.

(8) The Appeal Commissioners shall hear and determine an appeal to them made under subsection (7) as if it were an appeal against an assessment to tax and the provisions of the Income Tax Acts relating to the rehearing of an appeal and the statement of a case for the opinion of the High Court on a point of law shall apply accordingly with any necessary modifications.

(9) Where a person who is entitled to an allowance under subsection (2) in respect of capital expenditure incurred for the purpose of farming farm land transfers his interest in that farm land or any part of that farm land to another person, that other person shall, to the exclusion of the first-mentioned person be entitled to the allowances under this section for the years of assessment following the year in which the transfer of interest took place:

Provided that where the transfer of interest took place in relation to part only of the farm land, this subsection shall apply to so much of the allowance as is properly referable to that part of the land as if it were a separate allowance.

(10) Where expenditure is incurred partly for the purposes of farming and partly for other purposes, subsection (2) shall apply to so much only of that expenditure as on a just apportionment ought fairly to be treated as incurred for the purposes of farming.

(11) No allowance shall be made by virtue of this section in respect of any expenditure if for the same or any previous or subsequent year of assessment an allowance is or has been made in respect of it under Chapter II of Part XV or Chapter I of Part XVI of the Income Tax Act, 1967 .

(12) Expenditure shall not be regarded for any of the purposes of this section as having been incurred by any person in so far as it has been met directly or indirectly by the State, by any board established by statute, or by any public or local authority.