Finance Act 1963

38 Annual allowances for new machinery and plant in development districts

(1) Subject to the provisions of this section, annual allowances under Chapter II of Part X of the Act of 1952 in respect of capital expenditure incurred after the 3rd April 1963 on the provision of new machinery or plant (not being mobile equipment) for use in a development district for industrial purposes shall be computed in accordance with section 281 (normal method of computation) of the Act of 1952 as if, instead of requiring an annual allowance to be five-fourths of the percentage therein specified of the relevant capital amount, that section required it to be so much of that amount as is specified by the person to whom the allowance is to be made in making his claim for the allowance; and accordingly (but subject as aforesaid) neither section 35 of this Act nor section 282 (alternative method of computation), 284 (special method for mines, etc.) or 285 (adjustments in cases of abnormal use) of the Act of 1952 shall apply in relation to such allowances.

(2) If, during the basis period for any year of assessment and within the three years beginning when it was first put into use, any machinery or plant is used—

(a) in a place which is not included in any development district, or

(b) for purposes other than industrial purposes, or

(c) in a building or structure prevented by section 271(3) (dwelling-houses, retail shops, showrooms, hotels and offices) of the Act of 1952 from being an industrial building or structure within the meaning of Chapter I of Part X of that Act,

the foregoing subsection shall not apply to the annual allowance in respect of the machinery or plant for that or any subsequent year of assessment and shall be deemed not to have applied to the annual allowance in respect thereof for any previous year of assessment.

(3) Subsection (1) of this section shall not apply to annual allowances falling to be made to a person in respect of expenditure on the provision of machinery or plant treated as incurred by him by virtue of section 299 of the Act of 1952 (allowances to lessees) unless the contract of letting provides that he shall or may become the owner of the machinery or plant on the performance of the contract; and where the contract so provides, but without becoming the owner of the machinery or plant he ceases to be entitled (otherwise than on his death) to the benefit of the contract so far as it relates to the machinery or plant, the said subsection (1) shall be deemed not to have applied to annual allowances falling to be made to him in respect of the machinery or plant.

(4) Where subsection (1) of this section is to be deemed not to have applied to annual allowances for any year of assessment, there shall be made all such additional assessments and adjustments of assessments as may be necessary.

(5) A district shall be treated as being a development district within the meaning of this section—

(a) if and so long as, being within Great Britain, it is for the purposes of the Local Employment Act 1960 a development district as defined by section 1(2) of that Act, or

(b) if it is within Northern Ireland,

and a certificate given by a person authorised in that behalf by the President of the Board of Trade and stating that at the time or during the period specified in the certificate a place in Great Britain was or was not included in any development district shall be conclusive for the purposes of this section.

(6) In relation to any new town outside a development district which draws or will draw its population mainly from the district, this section shall apply as if the new town were included in the district, and a certificate given by a person authorised in that behalf by the Minister of Housing and Local Government, or (where the new town is in Scotland) the Secretary of State, and stating whether or not a new town draws or will draw its population mainly from a specified district shall be conclusive for the purposes of this subsection.

(7) Where a district in Great Britain ceases at any time to be a development district, this section shall apply in relation to the following machinery or plant as if the district had continued to be a development district, that is to say—

(a) machinery or plant which at that time is within, and has before that time been used in, the district;

(b) machinery or plant provided for use in the district under a contract entered into before that time ;

(c) machinery or plant provided for use in the district under a contract entered into within two years after that time and in the case of which the following conditions are satisfied—

(i) that it is for use in or about a building or structure provided for use for industrial purposes under a contract entered into after the 3rd April 1963, or is for use in conjunction with other machinery or plant so provided, and

(ii) that its provision was required for the fulfilment of the purpose for which the building or structure or, as the case may be, the other machinery or plant was provided, and

(iii) that contracts for the provision of a substantial proportion of the assets required for the fulfilment of that purpose had been entered into before the district ceased to be a development district.

(8) In this section—

• " industrial purposes " means the purposes of a trade, or a part of a trade, which—

  (a)

  is carried on in a mill, factory or other similar premises, or

  (b)

  consists in the carrying on of a dock, water, electricity or hydraulic power undertaking (as defined by section 271(5) of the Act of 1952) or a gas, transport, inland navigation, tunnel or bridge undertaking, or

  (c)

  consists in the manufacture of goods or materials or the subjection of goods or materials to any process, not being a process in the construction or erection of a building or structure, or

  (d)

  consists in the storage—

  (i)

  of goods or materials which are to be used in the manufacture of other goods or materials, or

  (ii)

  of goods or materials which are to be subjected, in the course of a trade, to any process, or

  (iii)

  of goods or materials which, having been manufactured or produced or subjected, in the course of a trade, to any process, have not yet been delivered to any purchaser, or

  (iv)

  of goods or materials on their arrival by sea or by air into any part of the United Kingdom, or

  (e)

  consists in the working of any mine, oil well or other source of mineral deposits, or

  (f)

  consists in the distribution of hydrocarbon oils by pipe-line;

• " mobile equipment " means machinery or plant having its own means of propulsion, or constructed or adapted for being towed, but does not include machinery or plant suitable for use only in or about a building or structure used for industrial purposes or any similar purposes or at a source of mineral deposits ;

• " new town " means an area designated under the New Towns Act 1946 as the site of a new town.