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Section 804ZA: prescribed schemes and arrangements |
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| After Schedule 28AA to ICTA insert— |
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Section 804ZA: prescribed schemes and arrangements |
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1 (1) | A scheme or arrangement, other than a scheme or arrangement |
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falling within sub-paragraph (3), is a prescribed scheme or |
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arrangement if one or more of paragraphs 2 to 6 apply to it. |
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(2) | A scheme or arrangement falling within sub-paragraph (3) is a |
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prescribed scheme or arrangement if one or more of paragraphs 2 |
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to 6 would, on the assumption in sub-paragraph (4), apply to it. |
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(3) | A scheme or arrangement falls within this sub-paragraph if its |
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main purpose, or one of its main purposes, is to cause an amount |
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of underlying tax allowable in respect of a dividend paid by a |
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body corporate resident in a territory outside the United Kingdom |
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to be taken into account in the case of a person. |
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(4) | The assumption is that the body corporate is resident in the United |
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(5) | Nothing in sub-paragraph (4) requires it to be assumed that there |
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is any change in the place or places at which the body corporate |
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carries on its activities. |
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Attribution of foreign tax |
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2 | This paragraph applies to a scheme or arrangement if the scheme |
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or arrangement enables a person who is party to, or concerned in, |
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the scheme or arrangement to pay, in respect of a source of income |
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or chargeable gain, an amount of foreign tax all or part of which is |
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properly attributable to another source of income or chargeable |
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gain (or to more than one such other source). |
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Effect of paying foreign tax |
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3 (1) | This paragraph applies to a scheme or arrangement if, under the |
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scheme or arrangement, sub-paragraph (2) is satisfied in relation |
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to a person who has claimed, or is in a position to claim, for a |
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chargeable period an allowance under any arrangements by way |
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of credit for foreign tax (“the claimant”). |
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(2) | This sub-paragraph is satisfied if— |
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(a) | an amount of foreign tax is paid by the claimant, and |
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(b) | at the time when the claimant entered into the scheme or |
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arrangement, it could reasonably be expected that the |
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effect of the payment of that amount of foreign tax on the |
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foreign tax total would be to increase it by less than the |
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amount allowable to the claimant as a credit in respect of |
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the payment of that amount of foreign tax. |
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(3) | The foreign tax total is the amount found by— |
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(a) | aggregating the amounts of foreign tax paid or payable in |
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respect of the transaction or transactions forming part of |
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the scheme or arrangement by persons party to, or |
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concerned in, the scheme or arrangement, and |
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(b) | taking into account any reliefs, deductions, reductions or |
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allowances against or in respect of any tax that arise to the |
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persons party to, or concerned in, the scheme or |
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arrangement (including any reliefs, deductions, reductions |
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or allowances arising to any one or more of those persons |
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as a consequence of the payment by the claimant of that |
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Effect of claim, election or other arrangement |
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4 (1) | This paragraph applies to a scheme or arrangement if under the |
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(a) | a step is taken by a person who is party to, or concerned in, |
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the scheme or arrangement, or |
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(b) | a step that could have been taken by such a person is not |
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| and that action or that failure to act has the effect of increasing a |
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claim made by a person who is party to, or concerned in, the |
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scheme or arrangement for an allowance by way of credit in |
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accordance with this Part or of giving rise to such a claim. |
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(2) | The steps mentioned in sub-paragraph (1) are steps that may be |
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(a) | under the law of any territory, or |
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(b) | under arrangements made in relation to any territory. |
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(3) | The steps mentioned in sub-paragraph (1) include— |
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(a) | claiming, or otherwise securing the benefit of, reliefs, |
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deductions, reductions or allowances; |
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(b) | making elections for tax purposes. |
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Effect attributable to scheme or arrangement |
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5 (1) | This paragraph applies to a scheme or arrangement if, under the |
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scheme or arrangement, sub-paragraph (2) is satisfied in relation |
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to a person who has claimed, or is in a position to claim, for a |
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chargeable period an allowance under any arrangements by way |
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of credit for foreign tax. |
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(2) | This sub-paragraph is satisfied if amount A is less than amount B. |
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(3) | Amount A is the amount of United Kingdom taxes payable by the |
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person in respect of income and chargeable gains arising in the |
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(4) | Amount B is the amount of United Kingdom taxes that would be |
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payable by the person in respect of income and chargeable gains |
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arising in the chargeable period if, in determining that amount, the |
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transactions forming part of the scheme or arrangement were |
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6 (1) | This paragraph applies to a scheme or arrangement if the scheme |
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(a) | the making by a person (“A”) of a relevant payment or |
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(b) | the giving, in respect of that payment or payments, of |
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consideration that satisfies the requirements of sub- |
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(2) | A payment made by A is a relevant payment if all or part of it may |
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be brought into account in computing A’s income for the purposes |
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(3) | Consideration given in respect of a payment or payments made by |
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A satisfies the requirements of this sub-paragraph if— |
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(a) | all or part of it consists of a payment or payments made to |
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A or a person connected with A, and |
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(b) | tax is chargeable in respect of the payment or payments |
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under the law of a territory outside the United Kingdom. |
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(4) | In this paragraph references to a payment include references to a |
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transfer of money’s worth. |
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(5) | Section 839 applies for the purposes of this paragraph.” |
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Capital allowances: renovation of business premises in disadvantaged areas |
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New Part 3A of the Capital Allowances Act 2001 |
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1 | After Part 3 of CAA 2001 insert— |
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BUSINESS PREMISES RENOVATION ALLOWANCES |
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360A | Business premises renovation allowances |
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(1) | Allowances are available under this Part if a person incurs qualifying |
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expenditure in respect of a qualifying building. |
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(2) | Allowances under this Part are made to the person who— |
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(a) | incurred the expenditure, and |
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(b) | has the relevant interest in the qualifying building. |
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360B | Meaning of “qualifying expenditure” |
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(1) | In this Part “qualifying expenditure” means capital expenditure |
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incurred before the expiry date on, or in connection with— |
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(a) | the conversion of a qualifying building into qualifying |
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(b) | the renovation of a qualifying building if it is or will be |
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qualifying business premises, or |
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(c) | repairs to a qualifying building or, where the qualifying |
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building is part of a building, to the building of which the |
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qualifying building forms part, to the extent that the repairs |
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are incidental to expenditure within paragraph (a) or (b). |
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(2) | In subsection (1) “the expiry date” means— |
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(a) | the fifth anniversary of the day appointed under section 92 of |
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(b) | such later date as the Treasury may prescribe by regulations. |
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(3) | Expenditure is not qualifying expenditure if it is incurred on or in |
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(a) | the acquisition of land or rights in or over land, |
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(b) | the extension of a qualifying building (except to the extent |
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required for the purpose of providing a means of getting to |
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or from qualifying business premises), |
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(c) | the development of land adjoining or adjacent to a qualifying |
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(d) | the provision of plant and machinery, other than plant or |
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machinery which is or becomes a fixture as defined by section |
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(4) | For the purposes of this section, expenditure incurred on repairs to a |
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building is to be treated as capital expenditure if it is not expenditure |
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that would be allowed to be deducted in calculating the profits of a |
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property business, or of a trade, profession or vocation, for tax |
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(5) | The Treasury may by regulations make further provision as to |
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expenditure which is, or is not, qualifying expenditure. |
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QUALIFYING BUILDINGS AND QUALIFYING BUSINESS PREMISES |
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360C | Meaning of “qualifying building” |
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(1) | In this Part “qualifying building”, in relation to any conversion or |
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renovation work, means any building or structure, or part of a |
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building or structure, which— |
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(a) | is situated in an area which, on the date on which the |
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conversion or renovation work began, was a disadvantaged |
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(b) | was unused throughout the period of one year ending |
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immediately before that date, |
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(c) | on that date, had last been used— |
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(i) | for the purposes of a trade, profession or vocation, or |
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(ii) | as an office or offices (whether or not for the purposes |
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of a trade, profession or vocation), |
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(d) | on that date, had not last been used as, or as part of, a |
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(e) | in the case of part of a building or structure, on that date had |
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not last been occupied and used in common with any other |
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part of the building or structure other than a part— |
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(i) | as respects which the condition in paragraph (b) is |
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(ii) | which had last been used as a dwelling. |
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(2) | In this section “disadvantaged area” means— |
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(a) | an area designated as a disadvantaged area for the purposes |
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of this section by regulations made by the Treasury, or |
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(b) | if no regulations are made under paragraph (a), an area for |
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the time being designated as a disadvantaged area for the |
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purposes of Schedule 6 to the Finance Act 2003 (stamp duty |
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land tax: disadvantaged areas relief). |
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(3) | Regulations under subsection (2)(a) may— |
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(a) | designate specified areas as disadvantaged areas, or |
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(b) | provide for areas of a description specified in the regulations |
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to be designated as disadvantaged areas. |
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(4) | If regulations under subsection (2)(a) so provide, the designation of |
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an area as a disadvantaged area shall have effect for such period as |
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may be specified in or determined in accordance with the |
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(5) | Regulations under subsection (2)(a) may— |
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(a) | make different provision for different cases, and |
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(b) | contain such incidental, supplementary, consequential or |
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transitional provision as appears to the Treasury to be |
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(6) | Where a building or structure (or part of a building or structure) |
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which would otherwise be a qualifying building is on the date |
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mentioned in subsection (1)(a) situated partly in a disadvantaged |
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area and partly outside it, only so much of the expenditure incurred |
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in accordance with section 360B as, on a just and reasonable |
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apportionment, is attributable to the part of the building or structure |
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located in the disadvantaged area is to be treated as qualifying |
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(7) | The Treasury may by regulations make further provision as to the |
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circumstances in which a building or structure or part of a building |
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or structure is, or is not, a qualifying building. |
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