Taxes Consolidation Act 1997 section 317

Treatment of grants

Section 317 deals with how grants affect the calculation of capital allowances on industrial buildings, machinery and plant, and provides a special exception for machinery or plant used in food processing trades.

• Capital allowances are generally calculated on the cost of an asset after deducting any grants received from the State, a statutory board, a public or local authority, or (for expenditure from 6 May 1993) any other person.
• An exception applies where a company incurs capital expenditure on machinery or plant used solely in the manufacture of processed food in its own food processing trade — in such cases, allowances are calculated on the full cost without deducting grants.
• Processed food means food intended for human consumption that has been manufactured in the State using machinery or plant, where the finished product differs substantially in form and value from the raw materials — it does not include food that has merely been preserved, pasteurised, frozen, washed or subjected to accelerated or retarded natural processes.
• The food processing exception does not apply to lessors or lessees of qualifying machinery or plant — only to companies that purchase the machinery or plant for use in their own food processing trade.