§ Mr. BurnsTo ask the Chancellor of the Exchequer what arrangements are being made to publish the draft legislation on capital allowance balancing charges for ships announced on 21 April; and if he will make a statement.
§ Mr. Kenneth ClarkeThe Inland Revenue is making available today the draft clauses which will implement the268W proposals on capital allowances for ships which I announced on 21 April 1994. These will allow balancing charges arising on the disposal of a ship to be rolled over for a period of up to three years from the date on which it is disposed of. The charge will be set against subsequent expenditure on ships within that period.
Broadly speaking, the measure will apply to ships, including fishing vessels, disposed of on or after 21 April 1994 which are of a seagoing kind of 100 gross registered tonnes or more, but excluding those of a kind used for sport or recreational purposes. Ships brought into use by a shipowner on or after today will come within the scope of the measure where, for the first three years of use, they are registered in either the United Kingdom, its dependent territories or Crown dependencies, or another state within the European Union or European Economic Area. No registration requirement will apply to ships which the owners have used prior to today.
Further details of the proposed measure are included in a press release issued by the Inland Revenue today. A copy of this together with the draft clauses will be placed in the Library of the House of Commons. Subject to the outcome of discussions with the European Commission we intend to introduce these clauses in next year's Finance Bill.