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No. 174, in page 179, line 22 at end insert—
'3A.—(1) Subject to sub-paragraph (3) below, the provisions of sub-paragraph (2) below apply where—
- (a) by virtue of subsection (3B) of the principal section any amount falls to be treated as if it were a balancing charge, and
- (b) the person on whom the balancing charge is, by virtue of that subsection, to be made acquired the machinery or plant in question as a result of a transaction which was, or a series of transactions each of which was, between connected persons, and
- (c) a first-year allowance, a balancing allowance, or a writing-down allowance in respect of expenditure on the provision of that machinery or plant has been made to any of those persons.
(2) Where this sub-paragraph applies—
- (a) subsection (3B) of the principal section shall have effect as if it referred to the allowances specified in sub-paragraph (1)(c) above; and
- (b) for the purposes of that subsection any consideration paid or received on a disposal of the machinery or plant between connected persons shall be disregarded; and
- (c) if a balancing allowance or balancing charge is made in respect of the machinery or plant, there shall be made such adjustments of the relief falling to be taken into account by virtue of paragraph (a) above as are just and reasonable in the circumstances.
(3) Sub-paragraph (2) above does not apply where section 154(2), section 155(1), or section 225(2) of the Taxes Act or subparagraph (a) or sub-paragraph (b) of paragraph 13 of Schedule 8 to the Finance Act 1971 (succession to trades) applied on the occasion of the transaction or transactions referred to in subparagraph (1)(b).
(4) Section 533 of the Taxes Act (connected persons) applies for the purposes of this paragraph.'.