659 Farming: allowances for capital expenditure on the construction of farm buildings, etc. for control of pollution.

[FA97 s20(1) to (13)]

(1) This section shall apply to any person—

(a) carrying on farming, the profits or gains of which are chargeable to tax in accordance with section 655,

(b) for whom, in respect of capital expenditure to which paragraph (c) refers and in respect of farm land occupied by him or her, a farm nutrient management plan has been drawn up by an agency or planner approved to draw up such plans by the Department of Agriculture and Food, and drawn up in accordance with—

(i) the guidelines in relation to such plans entitled “Farm Nutrient Management Plan” issued by the Department of Agriculture, Food and Forestry on the 21st day of March, 1997, or

(ii) a plan drawn up under the scheme known as the Rural Environment Protection Scheme (REPS) or the scheme known as the Erne Catchment Nutrient Management Scheme, both being schemes administered by the Department of Agriculture and Food,

and

(c) who incurs capital expenditure on or after the 6th day of April, 1997, and before the ^[10]>[2]>6th day of April, 2000^{<[2][11]>[6]>[2]>}6 April 2003^<[2]<[6][6]>1 January 2004^{<[6]<[11][10]>}1 January 2007^{<[10]<[10][24]>[11]>}1 January 2009^{<[11]<[24][24]>}1 January 2011^<[24], on the construction of those farm buildings (excluding a building or part of a building used as a dwelling) or structures specified in the Table to this section in the course of a trade of farming land occupied by such person where such building or structures are constructed in accordance with that farm nutrient management plan and are certified as being necessary by that agency or planner for the purpose of securing a reduction in or the elimination of any pollution arising from the trade of farming.

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(2) Subject to the provisions of Article 6 of Council Regulation (EEC) No. 2328/91 of 15 July 1991¹ on improving the efficiency of agricultural structures, as amended, and subject to subsection (3), where a person to whom this section applies—

(a) has delivered to the Department of Agriculture and Food, a farm nutrient management plan referred to in subsection (1)(b), and

(b) incurs capital expenditure to which subsection (1) applies,

there shall be made to such person during a writing-down period of 8 years beginning with the chargeable period related to that expenditure, writing-down allowances (in this section referred to as “farm pollution control allowances”) in respect of that expenditure and such allowances shall be made in taxing the trade.

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(2)(a) Subject to the provisions of Article 6 of Council Regulation (EEC) No. 2328/91 of 15 July 1991¹, on improving the efficiency of agricultural structures, as amended, and subject to subsections (3) and (3A), where a person to whom this section applies—

(i) has delivered to the Department of Agriculture, Food and Rural Development a farm nutrient management plan referred to in subsection (1)(b), and

(ii) incurs capital expenditure to which subsection (1) applies,

there shall be made to such person during the writing-down periods, specified in paragraph (b), writing-down allowances (in this section referred to as “farm pollution control allowances”) in respect of that expenditure and such allowances shall be made in taxing the trade.

(b) The writing-down periods referred to in paragraph (a) shall be—

(i) 8 years beginning with the chargeable period related to the capital expenditure, where that expenditure is incurred before ^[12]>6 April 2000, or^<[12][12]>6 April 2000,^<[12]

(ii) 7 years beginning with the chargeable period related to the capital expenditure, where that expenditure is incurred on or after ^[13]>6 April 2000,^<[13][13]>6 April 2000 but before 1 January 2005, or^<[13]

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(iii) 3 years beginning with the chargeable period related to the capital expenditure, where that expenditure is incurred on or after 1 January 2005.

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(3) The farm pollution control allowances to be made in accordance with subsection (2) in respect of capital expenditure incurred in a chargeable period shall be—

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(a) as respects the first year of the writing-down period referred to in subsection (2)—

(i) where the capital expenditure incurred has not exceeded £20,000, an amount equal to 50 per cent of that expenditure, or

(ii) where the capital expenditure incurred has exceeded £20,000, an amount equal to £10,000,

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(a) as respects the first year of the writing-down period referred to in subsection (2), where the capital expenditure was incurred—

(i) before the 6th day of April, 1998, an amount equal to 50 per cent of that expenditure or £10,000, whichever is the lesser, or

(ii) on or after the 6th day of April, 1998, an amount equal to 50 per cent of that expenditure or £15,000, whichever is the lesser,

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(a) as respects the first year of the writing-down period referred to in subsection (2)(b)(i), where the capital expenditure was incurred—

(i) before 6 April 1998, an amount equal to 50 per cent of that expenditure or ^[7]>£10,000^<[7][7]>€12,700^<[7], whichever is the lesser,

(ii) on or after 6 April 1998 and before 6 April 2000, an amount equal to 50 per cent of that expenditure or ^[8]>£15,000^<[8][8]>€19,050^<[8], whichever is the lesser,

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(b) as respects the next 6 years of that writing-down period, an amount equal to 15 per cent of the balance of that expenditure after deducting the amount of any allowance made by virtue of paragraph (a), and

(c) as respects the last year of that writing-down period, an amount equal to 10 per cent of the balance of that expenditure after deducting the amount of any allowance made by virtue of paragraph (a).

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(3A) The farm pollution control allowances to be made in accordance with subsection (2) during the writing-down period referred to in subsection (2)(b)(ii), in respect of capital expenditure incurred in a chargeable period, where that expenditure is incurred ^[15]>on or after 6 April 2000 shall,^<[15][15]>on or after 6 April 2000 but before 1 January 2005 shall,^<[15] subject to subsection (3B), be an amount equal to—

(a) 15 per cent of that expenditure incurred for each of the first 6 years of the writing-down period, and

(b) 10 per cent of that expenditure for the last year of the writing-down period.

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(3AA) The farm pollution control allowances to be made in accordance with subsection (2) during the writing-down period referred to in subsection (2)(b)(iii) in respect of capital expenditure incurred in a chargeable period, shall where that expenditure is incurred on or after 1 January 2005, and subject to subsection (3BA), be an amount equal to 33 per cent of that expenditure incurred for each of the 3 years of the writing-down period.

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(3B) (a) ^[17]>In this subsection^<[17][17]>In this subsection and subsection (3BA)^<[17]—

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“residual amount”, in relation to capital expenditure incurred in a chargeable period, means an amount equal to 50 per cent of that expenditure or ^[9]>£25,000^{<[9] [9]>}€31,750^<[9]whichever is the lesser;

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“residual amount”, in relation to capital expenditure incurred in a chargeable period, means an amount equal to 50 per cent of that expenditure or—

(i) €31,750, where incurred in a chargeable period ending before 1 January 2006, and

(ii) €50,000, in any other case,

whichever is the lesser;

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“specified amount”, in relation to capital expenditure incurred in a chargeable period, means the balance of that expenditure after deducting the ^[18]>residual amount;^<[18][18]>residual amount.^<[18]

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“specified return date for the chargeable period” has the same meaning as in section 950.

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(b) Notwithstanding subsection (3A), where farm pollution control allowances are to be made to a person in accordance with that subsection during the writing-down period referred to in subsection (2)(b)(ii), such person may elect to have those allowances made in accordance with this subsection and, where such person so elects, the allowances shall be made in accordance with this subsection only.

(c) Where paragraph (b) applies to a person, the farm pollution control allowances to be made to such person during the writing-down period referred to in subsection (2)(b)(ii) shall be an amount equal to—

(i) 15 per cent of the specified amount for each of the first 6 years of the writing-down period, and

(ii) 10 per cent of the specified amount for the last year of the writing-down period, and

(iii) subject to paragraph (d), the whole or any part of the residual amount, as is specified by the person to whom the allowances are to be made, in any year of the writing-down period.

(d) The allowances to be made in accordance with subparagraphs (i) and (iii) of paragraph (c) or subparagraphs (ii) and (iii) of that paragraph, as the case may be, for any year of the writing-down period, shall not in the aggregate exceed the residual amount.

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(3BA) (a) Notwithstanding subsection (3AA), where farm pollution control allowances are to be made to a person in accordance with that subsection during the writing-down period referred to in subsection (2)(b)(iii), such person may elect to have those allowances made in accordance with this subsection and, where such person so elects, the allowances shall be made in accordance with this subsection only.

(b) Where paragraph (a) applies to a person, the farm pollution control allowance to be made to such person during the writing-down period referred to in subsection (2)(b)(iii) shall be an amount equal to—

(i) 33⅓ per cent of the specified amount for each of the 3 years of the writing-down period, and

(ii) subject to paragraph (c), the whole or any part of the residual amount, as is specified by the person to whom the allowances are to be made, in any year of the writing-down period.

(c) The allowances to be made in accordance with paragraph (b) for any year of the writing-down period, shall not in the aggregate exceed the residual amount.

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(3C) (a) An election by a person to whom this section applies in relation to the farm pollution control allowances claimed in subsection (3B) shall be made in writing on or before the specified return date for the chargeable period in which the expenditure is incurred and shall be included in the annual statement required to be delivered under the Income Tax Acts of the profits or gains from farming as set out in subsection (5).

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(3C) (a) An election by a person to whom this section applies in relation to the farm pollution control allowances claimed in subsection (3B) or (3BA), as the case may be, shall be made in writing on or before the specified return date for the chargeable period (within the meaning of section 950) in which the expenditure is incurred and shall be included in the annual statement required to be delivered under the Income Tax Acts of the profits or gains from farming as set out in subsection (5).

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(b) An election made under the provisions of paragraph (a) cannot be altered or varied during the writing-down period to which it refers.

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(4) For the purposes of the application to this section of section 321, “basis period” has the meaning assigned to it by section 306.

(5) Any claim by a person for a farm pollution control allowance to be made to such person shall be included in the annual statement required to be delivered under the Income Tax Acts of the profits or gains from farming, and section 304(4) shall apply in relation to the allowance as it applies in relation to allowances to be made under Part 9.

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(6) Any claim for a farm pollution control allowance shall be made to and determined by the inspector, but any person aggrieved by any decision of the inspector on any such claim may, on giving notice in writing to the inspector within 21 days after the notification to the person of the decision, appeal to the Appeal Commissioners.

(7) The Appeal Commissioners shall hear and determine an appeal to them made under subsection (6) as if it were an appeal against an assessment to tax, and the provisions of the Income Tax Acts relating to the rehearing of an appeal and to the statement of a case for the opinion of the High Court on a point of law shall apply accordingly with any necessary modifications.

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(8) Subject to subsection (9), where a person who is entitled to farm pollution control allowances in respect of farm land occupied by the person transfers his or her interest in that farm land or any part of that farm land to another person, that other person shall, to the exclusion of the first-mentioned person, be entitled to the allowances under this section for the chargeable periods following the chargeable period in which the transfer of interest took place.

(9) Where the transfer of interest to which subsection (8) refers took place in relation to part of the farm land, subsection (8) shall apply to so much of the farm pollution control allowance as is properly referable to that part of the land as if it were a separate allowance.

(10) Where expenditure is incurred partly for a purpose for which a farm pollution control allowance is to be made and partly for another purpose, subsection (2) shall apply to so much only of that expenditure as on a just apportionment ought fairly to be treated as incurred for the first-mentioned purpose.

(11) No farm pollution control allowance shall be made in respect of any expenditure if for the same or any other chargeable period an allowance is or has been made in respect of that expenditure under ^[22]>Chapter 1^<[22][22]>Chapter 1 or Chapter 2^<[22] of Part 9 or section 658.

(12) Expenditure shall not be regarded for the purposes of this section as having been incurred by a person in so far as it has been or is to be met directly or indirectly by the State or by any person other than the first-mentioned person.

(13) For the purposes only of determining, in relation to a claim for a farm pollution control allowance, whether and to what extent capital expenditure incurred on the construction of a building or structure to which this section applies is incurred or not incurred in the period specified in subsection (1)(c), only such an amount of that capital expenditure as is properly attributable to work on the construction of the building or structure actually carried out during that period shall (notwithstanding any other provision of the Tax Acts as to the time when any capital expenditure is or is to be treated as incurred) be treated as having been incurred in that period.