Investment Incentives Act · 1984 Revised Edition · Chapter II
18. Capital allowance
Official textFrom Attorney General's Chambers, unchanged
The income of a pioneer company in respect of its old business falling to be ascertained in accordance with this Act for any accounting period shall be so ascertained (after making any necessary adjustments in consequence of a direction under section 17) without making any deductions which might otherwise fall to be made under section 13 of the Income Tax
Act.
Notwithstanding subsection (1) and subject to subsection (3), where an asset is used for the purposes of the new business of a pioneer company, any capital expenditure incurred by the pioneer company in respect of the asset before the end of its tax relief period shall for the purposes of section 13 of the Income Tax Act be deemed to have been incurred on the day following the end of its tax relief period.
Where an asset is used for the purposes of the old business of a pioneer company and in respect of that business the company incurs a loss (ascertained in accordance with
Cap. 35.
Cap. 35.
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section 25(2) for the whole of its tax relief period, subsections
and (2) shall not apply and —
there shall be ascertained for each year of assessment to which the tax relief period relates the notional amount of any allowances which, but for subsection (1), would have been made under section 13
of the Income Tax Act;
the aggregate of any notional amounts ascertained under paragraph (a) shall be allowed in respect of the new business as deductions under that section for the first year of assessment after the end of the tax relief period;
subject to subsection (4)(b), the residual expenditure at the end of the tax relief period shall be arrived at by deducting that aggregate from the total capital expenditure incurred by the company on the assets during the tax relief period, and that residual expenditure shall for the purposes of that section be deemed to have been incurred for the purposes of that section be deemed to have been incurred for the purposes of the new business on the day following the end of the tax relief period, so however that no initial allowance shall be allowed in respect thereof.
Where in a case to which the foregoing subsections apply an asset for the purposes of a pioneer enterprise is also used for the purposes of an enterprise which is not a pioneer enterprise —
there shall be made under section 13 of the
Income Tax Act in respect of any capital expenditure on the asset such a deduction as is reasonable having regard to the extent to which the asset is used for the purposes of that second-mentioned enterprise;
the residual expenditure arrived at under section(3)(c) shall be reduced by the amount of any deduction made under paragraph (a).
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