Taxes Consolidation Act 1997 section 660

Farming: wear and tear allowances deemed to have been made in certain cases

Section 660 provides that wear and tear allowances are deemed to have been made for certain previous chargeable periods when calculating capital allowances or balancing adjustments for machinery or plant used in farming.

• When calculating a wear and tear allowance, balancing allowance or balancing charge for a farmer's machinery or plant, the section deems wear and tear allowances to have been made for previous chargeable periods even where no allowance was actually claimed or given.
• The deemed allowances apply for periods where the machinery was not used for farming, the farmer was taxed on a notional basis, farming was not carried on, or farming profits were not fully charged to tax.
• For companies that were outside the charge to corporation tax during any period after 5 April 1976, each relevant income tax year or part-year is treated as though it were an accounting period of the company.
• The section does not override the rule that a balancing charge cannot exceed the total capital allowances actually granted for the asset.