HC Deb 14 July 1961 vol 644 c81W
Mr. McKay

asked the Chancellor of the Exchequer (1) on what basis the 40 per cent. investment allowance for shipbuilding is calculated; and what relation it bears to capital investment;

(2) to what extent it is his practice to base the 40 per cent. investment allowance on the construction of a ship on the capital value of the ship; and to what extent this assessment is dependent on the profit made on the construction.

Sir E. Boyle

The 40 per cent. investment allowance does not apply to shipbuilding concerns; the allowance is given to a shipowner on the amount of capital expenditure incurred by him on the provision of a new (but not a second-hand) ship and is deducted from the profits assessed before arriving at the amount chargeable to tax. It does not depend in any way on the profits made by the shipbuilder.