Section 13
Initial and annual allowances. Industrial buildings and structures
(1)
Where, in or after the basis period for the first year of assessment under this Act, a person incurs capital expenditure on the construction of a building or structure which is to be an industrial building or structure occupied for the purposes of a trade, there shall be made to the person who incurred the expenditure for the year of assessment in the basis period for which the expenditure was incurred an allowance (in this section referred to as an initial allowance) equal to 40 per cent thereof.
The provisions of this subsection apply in relation to expenditure incurred by a person on or after the 1st day of January 2008 but before the commencement of the first basis period as if it had been incurred by him on the first day of that period.
(2)
Where any person is, at the end of the basis period for any year of assessment, entitled to an interest in a building or structure which is an industrial building or structure and where that interest is the relevant interest in relation to the capital expenditure incurred on the construction of that building or structure, an allowance (in this section referred to as an annual allowance) equal to 20 per cent of that expenditure shall be made to him for that year of assessment;
Income Tax
B.L.R.O. 1/2024 45
(b)
Where, at any time in or after the basis period for the first year of assessment under this Act, the interest in a building or structure which is the relevant interest in relation to any expenditure is sold while the building or structure is an industrial building or structure, the annual allowance, in the years of assessment the basis periods for which end after the time of that sale, shall be computed by reference to the residue of that expenditure immediately alter the sale and shall be —
(i)
the fraction of that residue, the numerator of which is one, and the denominator of which is the number of years of assessment comprised in the period which begins with the first year of assessment for which the buyer is entitled to an annual allowance or would be so entitled if the building or structure had at all material times continued to be an industrial building or structure, and ends with the fiftieth year after that in which the building or a structure was first used; or
(ii)
20 per cent of that residue, whichever is the greater, and so on for any subsequent sales;
(c)
Notwithstanding anything in the preceding provisions of this section, in no case shall the amount of an annual allowance made to a person for any year of assessment in respect of any expenditure exceed what, apart from the writing off falling to be made by reason of the making of that allowance, would be the residue of that expenditure at the end of his basis period for that year of assessment.