Finance Act 1974

Replacement of business assets: depreciating assets

19 (1) Paragraph 16 of Schedule 19 to the [1969 c. 32.] Finance Act 1969 (replacement of business assets: depreciating assets) shall have effect in relation to the preceding paragraph as it has effect in relation to section 33 of the Finance Act 1965, subject to the modifications specified in the following provisions of this paragraph and any other necessary modifications.

(2) For sub-paragraph (1) substitute:—

“(1) Paragraph 18 of Schedule 3 to the Finance Act 1974 shall have effect subject to the provisions of this paragraph, in which—

(a) the ' tax reduction' means the reduction in the income tax or corporation tax to which the person carrying on the trade is chargeable which is made under sub-paragraph (3) of the said paragraph 18 in connection with a disposal of an asset (called ' asset No. 1');

(b) the ' expenditure reduction' means the related amount by which, under sub-paragraph (4) of that paragraph, and apart from the provisions of this paragraph, the expenditure allowable in respect of another asset (called ' asset No. 2 ') is reduced ;

(c) any reference to an expenditure reduction of any amount being carried forward to any asset is a reference to a reduction of that amount in expenditure allowable in respect of that asset”.

(3) In sub-paragraph (2)—

(a) for the words from the beginning to " until" substitute—

“(2) If asset No. 2 is a depreciating asset, the expenditure reduction shall not be carried forward, but when—”

(b) after " comes first" add “an amount equal to the tax reduction may be assessed to tax and recovered accordingly.

Any assessment to income tax or corporation tax under this paragraph shall be made under Case VI of Schedule D. ”.

(4) In sub-paragraph (3)—

(a) for " section 33 " substitute " paragraph 18 ";

(b) for " the gain held over from asset No. 1 " substitute " the expenditure reduction ".

(5) In sub-paragraph (4)—

(a) for the words from " the time when " to " accrue " substitute " the occurrence of whichever of the events mentioned in sub-paragraph (2) above comes first ";

(b) for " the postponed gain" substitute " the expenditure reduction ".

(6) Omit sub-paragraphs (5) and (8) and, in sub-paragraph (9), for " section 33 " substitute " paragraph 18 ".