Chapter IICapital Allowances
117Security
(1)This section applies where—
(a)an individual, or a partnership of individuals, carries on a trade, profession or vocation,
(b)expenditure is incurred by the individual or partnership in connection with the provision for or use by the individual, or any of the individuals, of a security asset,
(c)no sum in respect of the expenditure could be deducted in computing the profits or gains of the trade, profession or vocation for the purposes of Case I or Case II of Schedule D, and
(d)apart from this section, paragraph (a) or paragraph (b) (or both) of section 44(1) of the [1971 c. 68.] Finance Act 1971 (capital allowances) would not apply.
(2)In a case where this section applies, Chapter I of Part III of the Finance Act 1971 shall apply as if—
(a)the expenditure were capital expenditure incurred on the provision of machinery or plant wholly and exclusively for the purposes of the trade, profession or vocation concerned,
(b)in consequence of the expenditure being incurred, the machinery or plant belonged to the individual or partnership carrying on the trade, profession or vocation, and
(c)the disposal value of the machinery or plant were nil.
(3)Subsection (2) above shall not apply unless the asset is provided or used to meet a threat which—
(a)is a special threat to the individual’s personal physical security, and
(b)arises wholly or mainly by virtue of the particular trade, profession or vocation concerned.
(4)Subsection (2) above shall not apply unless the person incurring the expenditure has as his sole object in doing so the meeting of that threat.
(5)Subsection (2) above shall not apply unless the person incurring the expenditure intends the asset to be used solely to improve personal physical security.
(6)But in a case where—
(a)apart from subsection (5) above, subsection (2) above would apply, and
(b)the person incurring the expenditure intends the asset to be used partly to improve personal physical security,
subsection (2) shall nevertheless apply, but only so as to treat the appropriate proportion of the expenditure there mentioned as capital expenditure incurred as there mentioned.
(7)For the purposes of subsection (6) above the appropriate proportion of the expenditure mentioned in subsection (2) above is such proportion of that expenditure as is attributable to the intention of the person incurring it that the asset be used to improve personal physical security.
118Security: supplementary
(1)For the purposes of section 117 above—
(a)a security asset is an asset which improves personal security,
(b)references to an asset do not include references to a car, a ship or an aircraft,
(c)references to an asset do not include references to a dwelling or grounds appurtenant to a dwelling, and
(d)references to an asset include references to equipment and a structure (such as a wall).
(2)If the person incurring the expenditure intends the asset to be used solely to improve personal physical security, but there is another use for the asset which is incidental to improving personal physical security, that other use shall be ignored in construing section 117(5) above.
(3)The fact that an asset improves the personal physical security of any member of the family or household of the individual concerned, as well as that of the individual, shall not prevent section 117(2) above from applying.
(4)For the purposes of section 117 above, it is immaterial whether or not the asset becomes affixed to land (whether constituting a dwelling or otherwise).
(5)Section 117 above applies where expenditure is incurred on or after 6th April 1989.
119Expenditure on stands at sports grounds
(1)If a person carrying on a trade incurs expenditure, in respect of a regulated stand at a sports ground used by him for the purposes of his trade, in taking—
(a)steps necessary for compliance with the terms and conditions of a safety certificate issued for the stand, or
(b)steps specified in a letter or other document sent or given to him by or on behalf of the local authority for the area in which the ground is situated as steps the taking of which either would be taken into account by them in deciding what terms and conditions to include in a safety certificate to be issued for the stand or would lead to the amendment or replacement of a safety certificate issued or to be issued for it,
then, if an allowance or deduction in respect of the expenditure could not, apart from this section, be made in taxing the trade or computing the profits or gains arising from it, Chapter I of Part III of the [1971 c. 68.] Finance Act 1971 shall apply as if the expenditure were capital expenditure incurred on the provision of machinery or plant for the purposes of the trade, and as if the machinery or plant had, in consequence of his incurring the expenditure, belonged to him, and as if the disposal value of the machinery or plant were nil.
(2)In this section “local authority”, “regulated stand”, “safety certificate” and “sports ground” have the same meanings as in Part III of the [1987 c. 27.] Fire Safety and Safety of Places of Sport Act 1987.
(3)This section shall be construed as if contained in Chapter I of Part III of the Finance Act 1971.
(4)This section shall be deemed to have come into force on 1st January 1989.
120Forestry land: abolition of agricultural buildings allowances
(1) This section applies to any allowance under—
(a)section 68 of the [1968 c. 3.] Capital Allowances Act 1968 (agricultural buildings allowances in respect of expenditure incurred before 1st April 1986); or
(b)Schedule 15 to the Finance Act 1986 (agricultural buildings allowances in respect of expenditure incurred on or after that date),
which would not fall to be made if that section or Schedule had been enacted without any reference to forestry land or the purposes of forestry; and any reference in this section to an allowance is a reference to an allowance to which this section applies.
(2)Subject to subsection (4) below, no allowance shall be made for a chargeable period beginning on or after 20th June 1989.
(3)Subject to subsection (4) below, any allowance which falls to be made—
(a)for the year of assessment 1989-90; or
(b)for an accounting period of a company beginning before and ending on or after 20th June 1989,
shall be apportioned (on a time basis according to their respective lengths) between the part of that year or period beginning on that date and the other part; and so much of any such allowance as is apportioned to the part beginning on that date shall not be made.
(4)Subsections (2) and (3) above shall not have effect in relation to an allowance which falls to be made for a chargeable period which begins before 6th April 1993 and is a period in relation to which an election under paragraph 4 of Schedule 6 to [1988 c. 39.] the Finance Act 1988 (commercial woodlands: Schedule D election for transitional period) has effect in respect of the relevant land.
(5)Any such allowance as is mentioned in subsection (4) above which, for an accounting period of a company ending on or after 6th April 1993, falls to be made otherwise than under paragraph 11(1) of Schedule 15 to the Finance Act 1986 shall be apportioned (on a time basis according to their respective lengths) between the part of that period beginning on that date and the other part; and so much of any such allowance as is apportioned to the part beginning on that date shall not be made.
(6)In subsection (4) above “the relevant land”, in relation to an allowance falling to be made in respect of any expenditure, means the land for the purposes of forestry on which that expenditure was incurred.
121Miscellaneous amendments
(1)Schedule 13 to this Act (which makes miscellaneous amendments of the enactments relating to capital allowances) shall have effect.
(2)That Schedule shall be construed as one with Part I of the [1968 c. 3.] Capital Allowances Act 1968.