Revenue Note for Guidance
This section deems a wear and tear allowance to have been given for certain previous chargeable periods when a wear and tear allowance, a balancing allowance or a balancing charge is being calculated for a particular year of assessment in respect of machinery or plant used by a farmer.
(1) The expressions “balancing allowance”, “balancing charge” and “wear and tear allowance” are explained by reference to various other provisions of the Act.
(2) In determining whether a wear and tear allowance, a balancing allowance or a balancing charge is to be made to or on a farmer in respect of machinery or plant, a wear and tear allowance is deemed to have been made for previous chargeable periods in which the farmer owned the item and as if the following conditions were met —
(3) The deemed wear and tear allowance applies for every previous chargeable period in which the farmer owned the machinery or plant and —
(4) In the case of companies not within the charge to corporation tax, a year of assessment is taken as a chargeable period of the company.
(5) This section does not affect section 288(4) which provides that a balancing charge cannot be greater than the capital allowances granted in respect of the machinery or plant.
Relevant Date: Finance Act 2021