SIXTH SCHEDULEIncome Tax: Capital Allowances
PART IMachinery and Plant
3
(1)
Subject to the provisions of paragraphs 4 and 6 of this Schedule, the next following sub-paragraph shall have effect where an event occurs which gives rise or might give rise to a balancing allowance or balancing charge under the principal Chapter in respect of machinery or plant, and either—
(a)
the event is the permanent discontinuance of the trade and immediately after the time of the discontinuance the machinery or plant continues to belong to the person by whom the trade was carried on immediately before the said time and the case is one not falling within the last foregoing paragraph; or
(b)
the event is the permanent discontinuance of the trade and at the time of the discontinuance the machinery or plant is either sold at less than the open-market price, the sale not being one to which section three hundred and twenty-seven of the Income Tax Act, 1952, applies, or the machinery or plant is given away; or
(c)
the event is the sale of the machinery or plant at less than the open-market price, not being a sale to which the said section three hundred and twenty-seven applies, or is the gift of the machinery or plant; or
(d)
the event is that, after the setting-up and before the permanent discontinuance of the trade, the machinery or plant permanently ceases to be used for the purposes of a trade carried on by the person by whom the first-mentioned trade is being carried on, and so ceases either by reason of that person's transferring the machinery or plant to other use or, on a transfer of the trade which is not treated as involving the discontinuance thereof, by reason of the retention of the machinery or plant by the transferor.
(2)
For the purpose of determining whether a balancing allowance or balancing charge falls to be made and, if so, the amount of the allowance or, as the case may be, the amount on which the charge is to be made the event shall be treated as if it had given rise to sale, insurance, salvage or compensation moneys of an amount equal to the open-market price of the machinery or plant.