Page:Inland Revenue Ordinance, 1947 (Cap. 112).pdf/25

A.D. 1947]

Provided that notwithstanding anything in the foregoing the expression “industrial building or structure” does not include any building or structure in use as, or as part of, a dwelling house, retail shop, showroom, hotel or office or to any purpose ancillary to the purposes of a dwelling house, retail shop, showroom, hotel or office.

(2) The “relevant interest” means, in relation to any expenditure incurred on the construction of a building or structure the interest in that building or structure to which the person who incurred the expenditure was entitled when he incurred it.

(3) The “residue of expenditure” shall be the amount of the capital expenditure incurred in the construction of a building or structure reduced by—
 * (i) the amount of any initial allowance made; and
 * (ii) any annual allowance made; and
 * (iii) any balancing allowances granted;

and increased by any balancing charges made.

For the purpose of computing the residue of expenditure there shall be written off an amount of one-fiftieth of the expenditure in respect of any year of assessment in which no initial or annual allowance falls to be made.

38. (1) Where, in or after the basis period for the year of assessment 1947/48 a person carrying on a trade, profession or business incurs capital expenditure on the provision of machinery or plant for the purposes of that trade, profession or business, there shall be made to him, for the year of assessment in the basis period for which the expenditure is incurred an allowance, to be known as an “initial allowance” equal to one-fifth of that expenditure.

(2) Where at the end of the basis period for any year of assessment a person has in use machinery or plant for the purpose of his trade, profession or business there shall be made to him in respect of that year of assessment an allowance to be known as an “annual allowance” for depreciation by wear and tear of those assets. The allowance shall be calculated at the rates prescribed by the Board of Inland