380R Relocation allowance.

(1) A person carrying on a relevant trade, who incurs relocation expenditure in relation to that trade, may claim an allowance (in this section referred to as a “relocation allowance’) under this section in respect of that expenditure.

(2) A relocation allowance made to a person carrying on a relevant trade shall be made in taxing the trade.

(3) Where a person carrying on a relevant trade owns or owned establishment land and the whole of that land has not been disposed of at the end of the chargeable period, then the following provisions shall apply:

(a) no amount incurred in the chargeable period in respect of the cost of acquiring land may be included as relevant expenses unless the aggregate of the expenditure incurred in acquiring land necessary for the operation of the new installation in that and previous chargeable periods exceeds the market value of the establishment land at the date relevant expenses were first incurred, and

(b) for the first chargeable period in which the aggregate of the expenditure incurred in acquiring land necessary for the operation of the new installation exceeds the market value mentioned in paragraph (a), the amount to be included is the excess.

(4) Where a person carrying on a relevant trade owned establishment land in relation to that trade and is entitled to a relocation allowance for a chargeable period, which is or is subsequent to the first chargeable period at or before the end of which the whole of that land is disposed of, then the following provisions shall apply:

(a) no expenditure incurred in the chargeable period in respect of the cost of acquiring land may be included as relevant expenses unless the aggregate of the expenditure incurred on acquiring land necessary for the operation of the new installation in that and previous chargeable periods exceeds the total consideration received on the disposal of the establishment land reduced by any enhancement expenditure in relation to that establishment land incurred by that person at a time after all the old installations have been removed from that land, and

(b) the amount of expenditure which is included in relevant expenditure in respect of the cost of acquisition of land shall not exceed that excess.

(5) Notwithstanding section 380Q(2), where, in a chargeable period, a person carrying on a relevant trade in respect of which a relocation allowance has been granted under subsection (2) for previous chargeable periods, disposes of the whole or part of the establishment land in relation to that trade and as a consequence the whole of the establishment land in relation to that trade is disposed of at the end of that period, then the following provisions shall apply:

(a) if the aggregate of all consideration received on disposals of all establishment land reduced by any enhancement expenditure in relation to that establishment land incurred by that person at a time after all the old installations have been removed from that land—

(i) is less than the market value mentioned in subsection (3)(a), then a relocation allowance under subsection (2) shall be made in respect of the difference, in addition to a relocation allowance (if any) which may be due in respect of expenditure incurred in the chargeable period,

(ii) is greater than the market value mentioned in subsection (3)(a), then the difference shall, subject to paragraph (b), be treated as a trading receipt of that trade,

and

(b) the amount treated as a trading receipt of the trade under paragraph (a)(ii) shall not exceed the aggregate of relocation allowances in respect of establishment land allowed in previous chargeable periods.

(6) Where a person carrying on a relevant trade does not dispose of the whole of the establishment land in relation to the relevant trade within a period of 2 years beginning on the date on which that person ceases to use the old installation for the purposes of a relevant trade, then the person shall be deemed to have disposed of the establishment land in relation to that trade on the last day of the chargeable period in which that period ends for consideration equal to the aggregate of all consideration (if any) received in respect of parts of establishment land which have been disposed of and the market value of the whole or part of such land which the person owns at that date reduced by any enhancement expenditure in relation to that establishment land incurred by that person at a time after all the old installations have been removed from that land.

(7) Where land is appropriated as trading stock, section 596(1) shall apply for the purposes of this section, as it applies for the purposes of the Capital Gains Tax Acts.

(8) Where the relevant trade ceases before all establishment land in relation to that trade is disposed of, then the remaining land shall be deemed, for the purposes of this section, to have been disposed of on the date of cessation of the trade for its market value at that date.

(9) Where the whole or part of the establishment land is owned by a person (in this subsection referred to as the “first mentioned person”) connected with the person claiming relief under this Part, then that whole or part, as the case may be, shall be treated for the purposes of this Part as owned by the person claiming relief and this Part shall apply as if all actions of the first mentioned person in relation to the whole or part were actions of the person claiming relief.