§ Mr. Shoreasked the Chancellor of the Exchequer what proportion, in March 1984, of capital expenditure in (a) industrial plant and machinery and (b) buildings can be offset against profits taxation in the first year in the United States of America, Canada, Japan, Italy, France, Germany and the United Kingdom.
§ Mr. Moore[pursuant to his reply, 9 April 1984, c. 87–88]: The proportion of capital expenditure which can be set against tax in the first year can vary according to the type of asset involved, especially in those countries where the rates of write-off for tax purposes ar closely related to an asset's expected useful life. Rates of allowance for plant and machinery and for industrial buildings quoted in the following table are either those fixed by statute or the maximum understood to be normally acceptable.
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1984: Percentage of capital expenditure allowance in first year Country Machinery and Plant Industrial Building United States 25 (three year property)* 8 (10 year property) 15 (five year property)* 12 (15 year property) 8 (10 year property)* Canada *50 †5 Japan 20.6 (10 year useful life) 6.4 (35 year useful life) Italy 25 18 France 42 (10 year useful life) 5 Germany 30 5 United Kingdom —pre Budget 100 Assets other than motor cars and certain leased assets †75 100 per cent, for very small workshops and enterprise zones║ —post Budget ‡75 †50 * Investment tax credit also available which may reduce proportion of cost qualifying for allowance. † New construction only—additional 4 per cent, allowable if building in use for a qualifying purpose in that chargeable period. ‡ 100 per cent, if expenditure incurred under contract entered into on or before 13 March and in certain other circumstances. ║ 75 per cent, if expenditure incurred under contract entered into on or before 13 March.