asked the Minister for Finance the cost to the Exchequer if the 30 per cent restriction on capital allowances for farmers and appreciation of agricultural machinery on buildings were to be abolished and given full depreciation.
Written Answers. - Farmers' Allowances.
387.
It is presumed that the question refers to section 26 of the Finance Act, 1980, which imposed a restriction on the amount of free depreciation and initial allowance which could be claimed in respect of machinery and plant (other than fixed machinery or plant used in a farm building) in charging farming profits to tax. Such allowances are granted only up to the point at which the sum of all capital allowances to be granted equals 30 per cent of the chargeable profits before deduction of all capital allowances. Beyond this point, machinery and plant may be written off at normal rates of depreciation only.
Statistics are not available which would indicate a reliable cost to the Exchequer from abolishing this restriction. It is, however, very tentatively estimated that the annual yield from the restriction is of the order of £2 million.