Finance Act 1995

8 (1) Section 32 of that Act (capital allowances for machinery and plant used in estate management), except where it is applied for the purposes of corporation tax, shall have effect with the following modifications.

(2) Subsection (1) shall have effect as if—

(a) for the words from “entitled” to “arise” there were substituted “for the purposes of a Schedule A business”; and

(b) at the end there were inserted “set up and commenced on or after 6th April 1995 and as if that business were that person’s trade”.

(3) The following subsections shall be deemed to be inserted after that subsection—

“(1A) Subsection (1) above and the 1990 Act shall have effect, subject to subsections (1B) and (1C) below—

(a) as if the purposes for which a Schedule A business is to be treated as a trade did not include the purposes of so much of sections 61 and 67(2) of that Act (leased plant or machinery and expenditure on thermal insulation) as makes provision in relation to cases where machinery or plant or, as the case may be, an industrial building or structure has been let otherwise than in the course of a trade; and

(b) as if expenditure which for the purposes of section 61 of that Act is or falls to be treated as expenditure on the provision of machinery or plant first let otherwise than in the course of a trade were to be treated in all cases as expenditure on the provision of machinery or plant which, at the time when it is let or treated as let, is used for purposes which are other than those of a Schedule A business.

(1B) Section 73(2) and (3) of the 1990 Act shall not apply in the case of any allowance or charge by virtue of section 61(1) of that Act where the letting of the machinery or plant is in connection with anything done in the course of the carrying on of a Schedule A business; and in such a case, the allowance or charge shall be made in taxing the business as if the business were the trade of the person carrying on the business and were a trade set up and commenced on or after 6th April 1995.

(1C) Any allowance made by virtue of section 61(1) of the 1990 Act in a case where it applies by virtue of section 67(2) of that Act shall be made as mentioned in subsection (1B) above as if (in so far as it is not otherwise the case)—

(a) the person to whom the allowance is made were carrying on a Schedule A business; and

(b) the letting of the machinery or plant which is deemed under section 67(2) of that Act to have taken place had been a letting in connection with the carrying on of the Schedule A business which is carried on, or treated as carried on, by that person.”

(4) Subsections (2) to (6), and in subsection (7), the words from “and, on any assessment” onwards shall be deemed to be omitted.