678 Allowance for machinery and plant

Summary

This section provides for certain measures in relation to the capital allowances to be granted in respect of machinery or plant provided for use for the purposes of the trade of working a qualifying mine. In particular, it provides for a special investment allowance of 20 per cent in respect of expenditure on the provision of new machinery and plant (other than road vehicles) used for those purposes. This allowance is in addition to the normal capital allowance available for machinery and plant (for example, wear and tear allowances). The special investment allowance is restricted to expenditure incurred on or after 6 April 1974 and before 1 January 2011.

Details

(1) Provision is made for accelerated wear and tear allowances in respect of new machinery or plant (excluding road vehicles) provided for use on or after 6 April 1974 in the working of a qualifying mine by deeming such machinery or plant to be qualifying machinery or plant for the purpose of section 285. However, it should be noted that since the capital allowances changes in 1992, accelerated wear and tear allowances under section 285 are not generally available.

(2) An investment allowance of 20 per cent applies to expenditure on new machinery or plant brought into use for mining operations where the expenditure has been incurred on or after 6 April 1974 and before 1 January 2011.

(3) In general, the total capital allowances to be given in respect of machinery or plant cannot exceed the price paid for the asset. However, the 20 per cent investment allowance is not taken into account for this purpose.

(4) If the machinery or plant is sold or ceases to be used within 2 years of the time it began to be used, the investment allowance is to be withdrawn.

(5) Rules are set out to govern such matters as the date on which expenditure is deemed to be incurred, the non-allowance of expenditure which is met by State grants, the treatment of pre-trading expenditure and the determination of the chargeable period in which the allowance is to be made.

(6) A claim for the investment allowance must be included with the taxpayer’s annual statement under the Income Tax Acts and must be accompanied by a certificate stating that the expenditure was incurred on qualifying plant or machinery.

(7) Provision is made for the carry forward for income tax purposes of any excess investment allowance.

Relevant Date: Finance Act 2019