§ Mr. WoodcockTo ask the Chancellor of the Exchequer if he will publish a summary of the arrangements for special depreciation on shipping investment in European Economic Community countries.
Country Rate/Method of depreciation Notes Belgium Based on life of eight years; 20 per cent, a year straightline reducing to 10 per cent. Investment allowance of 13 per cent. for new ships. Denmark Stage payments in advance of delivery (up to a maximum of 30 per cent, of total cost) attract allowances of 15 per cent, a year for up to two years. Post-delivery rate on unrelieved expenditure is 30 per cent, (reducing balance). France According to life of ship: Life (years) Rate (reducing balance) (per cent.) 8 31.25 10 25 15 16.66 20 12.5 Federal Republic of Germany Normal rates based on expected useful life: large passenger ship: 18.75 per cent.; others: 25 per cent. (reducing balance).Corresponding straightline rates are 6.25 per cent, and 8.33 per cent. Additional 40 per cent, of net cost of new ship can be taken over first five years (straightline basis only). 80 per cent, of book profit from sale of ship can be taken to a tax-free reserve, provided ship owned for at least six years. Replacement must take place within two years. Greece Special tax rules according to age and tonnage of ship. (No details available.) Ireland Initial allowance of up to 75 per cent, for capital expenditure on new or secondhand ships (reducing to 50 per cent, for 1989–90) which may be taken as and when required. Italy Accelerated allowance of 15 per cent. for each of first three years. Normal rates thereafter. Passenger, tanker or refrigerated ships: 10 per cent. (straightline). Others (including dry cargo ships): 9 per cent. Netherlands Usual rates 12–16 per cent. (reducing balance) over 12–20 years according to expected life of ship. Special investment premium of 4 per cent. per year over five years reduces depreciation base. Book profit from sale of ship can be taken to tax-free reserve. Replacement must take place within four years. Spain Tankers, refrigerated ships: 15 per cent. Passenger/cargo: 12.5 per cent. (reducing balance). Corresponding straightline rates are 6 per cent. and 5 per cent. 10 per cent, tax credit for investment in new fixed assets. Book profit from sale of ship tax free if reinvested in replacement ship within two years. United Kingdom 25 per cent. of reducing balance. Allowances can be rolled forward and taken as required. Cost of newly-acquired ship can be used to offset a balancing charge on the disposal of another vessel, where disposal and acquisition occur in the same chargeable period.